Fundstrat
Fundstrat: Tech Underperformance, Fed Cuts & Gold Breakout | What’s Next for Markets?
9/3/2025, 8:46:51 PM
Economic Summary
- The Fed is widely expected to cut rates (an ~88% probability mentioned), which along with falling real rates supports equities and precious metals.
- There is about $7 trillion in money market funds earning roughly $500 billion annually, representing large dry powder that could flow into markets.
- The economy is described as in a 'sweet spot' — not collapsing, allowing earnings growth to remain solid while Fed policy turns dovish, implying potential for additional gains.
- Crude oil prices have been falling and, together with AI-driven deflationary effects and weaker wage growth, are argued to reduce inflationary pressure.
- Gold recently broke out above $3,500 amid falling real rates and dovish Fed expectations, making precious metals an attractive diversification option.
Bullish
- Fed likely to cut, supporting risk assets and precious metals.
- Large money-market dry powder ($7 trillion) could fuel equity inflows.
- Tech hardware and semiconductors outperforming; NVDA fundamentals remain strong.
Bearish
- Momentum slowing after a 113% run; break below $167 could drop NVDA to $161.
- Software group underperformance suggests sector rotation risk and potential weakness.
- Seasonal weakness in September-October could pressure leadership names and prompt pullbacks.
Bullish tickers
NVDAAAPLDELLHPQSTX
Bearish tickers
NVDA
NVDA
4 price targets
165184167161
Bullish
Still a compeling long-term hold: strong fundamentals, huge outperformance versus peers, and core ownership recommended.
Bearish
After a 113% run in 17 weeks, momentum has slowed and a break below $167 could see $161; seasonal pullback risk exists.
AAPL
Bullish
Tech hardware is outperforming; Apple cited as up over 10% and benefiting from sector strength.
Bearish
Seasonal weakness and broader software weakness could spill into hardware if momentum shifts.
DELL
Bullish
Listed among tech hardware winners, up over 10% in recent period.
Bearish
Could be vulnerable to a broader market pullback despite recent outperformance.
HPQ
Bullish
Highlighted as part of the outperforming tech hardware group.
Bearish
Subject to seasonal and momentum-driven weakness along with peers.
STX
Bullish
Seagate called out as a top performer within tech hardware recently.
Bearish
May face downside if momentum and seasonal trends reverse.
People mentioned
Mark NewtonJensen WongLou