AI Momentum Fuels Another Leg Higher as Powell Takes the Stage

E-mini S&P (December) / E-mini NQ (December)

S&P, yesterday’s close: Settled at 6752.50, up 30.00

NQ, yesterday’s close: Settled at 25,003.00, up 136.75

The melt higher continues. Yesterday, AAPL took the lead early, with participation from ORCL and TSLA, before news of NVDA’s $100 billion investment in OpenAI to build a 10-gigawatt project. This would account for where OpenAI could forecast the revenue to ramp up its data center build with ORCL through 2030. It’s almost as if there is a coordinated effort among AI leadership to release bits of AI developments on a weekly basis, working in harmony to stoke price action higher. On the one hand, the S&P is only +14% ytd, and on the other hand it’s +40% from the April low. If this year was to align with the prior two, there could be another 10% to go. However, it’s hard to imagine that happening without a breather from here.

Fed Chair Powell speaks today at 11:35 am CT, where he will deliver remarks on the economy from the Greater Providence Chamber of Commerce. Also, flash PMI data for September is due at 8:45 am CT, and additional Fed speak will pop up throughout the day.

E-mini S&P futures pinged a long-range extension level of 6757 yesterday, while the E-mini NQ neared its 100% extension from the high before the Fed meeting and the low during the Fed meeting. The extension levels have provided some guidance in trimming for the bulls and have opened the door to consolidation. Yesterday’s lower open did not leave a gap from Friday’s close, and one could argue that it was orderly. Still, there will be formidable supports in the path left behind from yesterday, and price action in the E-mini S&P would have to chew through first support at….