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Sellers are disappearing into thin air as investors prepare for the Federal Reserve to cut interest rates for the first time since the pandemic.
The S&P 500 surged 4 percent between Friday, September 6, and Friday, September 13. It was the biggest weekly gain since the index started rallying 10 months ago. The Nasdaq-100 had an even bigger move, advancing 5.9 percent.
Relief about semiconductors connected to the AI boom helped trigger the rally.
“We are ramping Blackwell and it’s in full production,” Nvidia (NVDA) CEO Jensen Huang said on Wednesday. That eased worries that a key chip for accelerated computing would be delayed. “We’ll … start scaling in Q4 and into next year… the demand on it is so great,” he added.
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Some of the move likely resulted from overly bearish sentiment. S&P Global reported that risk appetite hit a 16-month low in September. The American Association of Individual Investors cited the least bullishness in over three months and the National Association of Active Investment Managers noted stock exposure was near its lows of the year.
Those conditions may not be a surprise because every September has been negative since 2020. The two months preceding U.S. Presidential elections have also been periods of weakness for the market.
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