Equities finished the week higher after a week dominated by two events pulling risk in opposite directions.

Markets got some good news from Nvidia and some not-so-welcome news from Warsh. Nvidia did its job in validating the AI complex. Semiconductors were higher, and it gave the S&P 500 its best session since early August. Warsh then stepped up to the podium and made his inflation concerns clear, adding to the hawkish pricing in rates markets.

We’ll touch on Nvidia specifically later on, but elsewhere, software was strong and delivered some much-needed evidence that the AI opportunity is broadening, now a positive for software. Salesforce surged after stronger guidance and an expanded Anthropic partnership, while CrowdStrike rallied to a record as AI-related cybersecurity demand accelerated. It’s a continued case that “SaaSpocalypse” is company-specific. There will be winners and losers in the sector.

Breadth was weaker. Most S&P 500 sectors still finished lower. The relative attraction of equities is also becoming harder to ignore with the 10-year Treasury yield above 4.7%, leaving investors able to earn more income from government bonds than from almost every stock in the index.

Other markets responded largely to the Jackson Hole symposium speech, but we look more into this later on.

Below the paywall, we outline in detail the guide to trades moving markets, where they may be heading, and the actionable trades to consider.

“Warsh’s Judgment Day” — cross asset implications from Jackson Hole
“Investment Case for NVDA and META” — why Nvidia can outperform and the overhang that is now gone from Meta’s outlook
“Summary of House Views” — recapping all macro trades on the book

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Warsh’s Judgment Day

Setting up for a September Showdown

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