# Fed Rate Cut Odds Heat Up as Stocks Catch a Breather

Today's market is quite interesting: the S&P 500 rose slightly by 0.06%, while the Nasdaq actually fell by 0.60%, as the market digests yesterday's gains.

**The competition for AI chips heats up, dragging down tech stocks**

Nvidia led the decline with over 5% drop, as reports suggest that Meta is considering a large purchase of Google's TPU chips for its 2027 data centers. What does this mean? Google is finally gaining some presence in the AI acceleration chip sector, and Nvidia's monopoly position is starting to loosen. AMD also fell by over 7%, and the entire chip sector is undergoing a correction.

**Economic data signals interest rate cuts**

More noteworthy is the economic data: September retail sales only increased by 0.2% vs an expected 0.4%, core PPI also fell short of expectations, and ADP's weekly data shows that layoffs in private companies are accelerating, with consumer confidence in November plunging to a 7-month low.

Result? The 10-year US Treasury yield has rapidly fallen to 4.0%, and the market now expects an 80% chance that the Fed will cut interest rates by 25 basis points at the meeting on December 9.

**Other Highlights**:
- The real estate sector is taking off (riding the tailwind of declining bond yields)
- Casino stocks strengthen (Las Vegas casino revenue increased by 8.2% year-on-year in October)
- Crypto-related stocks follow suit and decline (BTC drops over 2%, Coinbase falls over 4%)