Market Update
Stocks are facing pressure as concerns about a tariff-induced economic slowdown continue to weigh on the market. Investors were disappointed by the lack of positive trade developments over the long holiday weekend, while tensions between the U.S. and China remain high. President Donald Trump’s ongoing criticism of Fed Chair Jay Powell has further unsettled the market.
AI Spending Developments
A research note from Wells Fargo suggested that Amazon might be scaling back its AI infrastructure expansion, joining Microsoft, which is reportedly slowing or digesting its recent AI investments. According to the note, Amazon has put a hold on some colocation data center leasing discussions. However, analysts at Cowen provided additional context, suggesting that Amazon’s move is related to a preference for self-owned and powered shell data centers, which offer more control and efficiency.
The mixed signals about AI spending continue, with some reports suggesting companies are reacting to a slowdown in demand, while others see it as a natural pause following intense investment. The big hyperscalers (Amazon, Alphabet, Microsoft, Meta Platforms) will provide clearer guidance on their capital expenditure plans in their upcoming earnings reports.
Earnings Calendar
Tuesday is a significant earnings day, with Club stock Danaher scheduled to report along with GE, Verizon, Northrop Grumman, RTX, Lockheed Martin, Elevance Health, Quest Diagnostics, and Kimberly-Clark. As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive trade alerts before Jim makes a trade in his charitable trust’s portfolio.
Conclusion
The market remains uncertain as trade tensions and AI infrastructure developments continue to impact investor sentiment. The upcoming earnings reports from major hyperscalers will provide crucial insights into their capital expenditure plans and the future of AI spending.
