The U.S. Senate confirmed Kevin Warsh as the 17th Chair of the Federal Reserve in a 54-45 vote on Wednesday, a decision that largely followed party lines and highlighted the central bank's deepening political entanglements. Warsh secured support from all Republican senators, with only one Democrat, Senator John Fetterman of Pennsylvania, voting in favor. Since 1977, when Senate confirmation became a requirement for the position, no Fed Chair has been confirmed with such a narrow margin.
A new Federal Reserve report indicates a significant decline in the financial well-being of Black adults, younger individuals, and low-income groups in the United States, despite most Americans reporting that their finances were at least adequate over the past year. The survey, conducted in October, found that 73% of U.S. adults felt they were "doing okay" financially. This figure is lower than pre- and post-pandemic levels but matches the 2024 reading. Disparities are evident: 86% of college graduates, 82% of Asian adults, and 91% of those earning over $100,000 annually reported financial stability.
Cisco announced plans to cut nearly 4,000 jobs as part of a restructuring effort to shift investments toward artificial intelligence and other high-growth areas. Concurrently, the company raised its annual revenue forecast, driven by a surge in orders from hyper-scale cloud providers. Shares of the San Jose, California-based networking equipment maker rose 15% in after-hours trading. CEO Chuck Robbins emphasized that in the AI era, successful companies will be those with the focus, urgency, and discipline to consistently invest in areas with the strongest demand and long-term value creation potential.
Nvidia's continued rally, marking its sixth consecutive day of gains, propelled the S&P 500 and Nasdaq Composite to record highs on Wednesday. Nvidia's stock rose 2.3%, and during the session, it became the first company to reach a market capitalization of $5.5 trillion, underscoring its market dominance. The surge reflects broader enthusiasm for semiconductor stocks. The Roundhill Memory ETF, which tracks computer memory and storage stocks, has accumulated $7.3 billion in assets since its launch on April 2 and has surged 96% over that period, fueled by insatiable demand related to AI infrastructure build-out.
Micron Technology's stock closed up 4.83% on Wednesday, surpassing $800 per share for the first time and reaching a record high, with a trading volume of $43.045 billion. Its market capitalization exceeded $900 billion. Bank of America raised its price target on Micron from $500 to $950, maintaining a "Buy" rating. The bank anticipates that demand for memory chips linked to AI servers and data centers will continue to outpace supply growth in the coming years. Analysts note that this supply-demand imbalance is a key component of the bullish narrative, as memory manufacturers face constrained production conditions due to the multi-year timelines and massive capital investments required for new capacity, while AI systems consume unprecedented amounts of high-performance memory.
Boston Federal Reserve President Susan Collins suggested that the Fed may need to raise interest rates if inflationary pressures broaden in the coming months, although this is not her base case for the U.S. economy. In an interview on Wednesday, Collins stated she expects inflationary pressures stemming from the war in Iran to eventually subside, with current shocks masking underlying signs of declining inflation. However, she noted that the probability of this scenario has decreased, while other, less optimistic scenarios involving higher and more persistent inflation have become more likely, potentially necessitating rate hikes.
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