Nvidia's Impressive Earnings Boost Market Sentiment, Fed Minutes Show Increasing Division Casting Doubt on December Rate Cut

On November 20th, NVIDIA (NVDA.O) announced this morning that its revenue for Q3 of fiscal year 2026 was $57 billion. This compares to $35.082 billion in the same period last year, with the market expecting $54.923 billion. The company also projected a revenue of $65 billion for Q4 of fiscal year 2026, while the market was expecting $61.6 billion. The growth rate of chip sales at the core of the artificial intelligence boom exceeded Wall Street's expectations, and the strong quarterly revenue forecast has led investors to believe that the artificial intelligence investment frenzy will continue. NVIDIA CEO Jensen Huang stated, "I haven't seen an artificial intelligence bubble." After NVIDIA's financial report was released, the market saw a rebound. Bitcoin rose to $91,500, Ethereum rose to $3,000, NVIDIA's stock rose more than 5% after hours, and Nasdaq futures opened 1% higher on Thursday. In addition, the Federal Reserve released the minutes of its October meeting this morning. These minutes revealed a division among policymakers on whether to cut rates in December. Several attendees opposed a rate cut, intensifying internal dissent within the Fed. Expectations for a December rate cut have cooled significantly as there were no key data available before the meeting. The market now estimates the probability of a rate cut in December at 31.6%. The minutes showed that "Many participants support reducing the target range for the federal funds rate," but also noted that some members who support a rate cut also find maintaining the rate unchanged acceptable. Several officials directly opposed a rate cut, expressing concern that the Committee's progress towards achieving the 2% inflation target had stalled. They pointed out that if inflation did not return to 2% promptly, long-term inflation expectations could rise. Most participants indicated that further lowering the policy rate could exacerbate the risks of persistent high inflation or be misinterpreted by the market as a lack of commitment by policymakers to achieving the 2% inflation target. These minutes reflect officials' efforts to seek consensus against the backdrop of missing data: balancing the dual risks of rising inflation and a weak job market, while warning that a "sharp re-evaluation" of investments in artificial intelligence by the market could lead to "disorderly stock market declines."