Global Markets Highlights: Will Interest Rates Finally Drop? Amazon’s $50B AI Bet, Nvidia–China Talks, Alibaba Surges & Google’s AI Breakthrough
1. Will the Fed Cut Rates? December Probabilities Surge to 72%
Expectations of an interest-rate cut rose sharply after comments from John Williams, President of the New York Federal Reserve and Vice Chair of the FOMC.
Key takeaways shaping market sentiment:
• Odds of a December rate cut jumped to 72%, up from 39% the previous day.
• Williams confirmed the labor market is “cooling” with rising downside risks to employment.
• Core inflation continues to trend lower without significant side effects.
This shift in expectations could drive volatility in bonds, FX, and equities as traders recalibrate their rate-cut bets.
2. Amazon Announces a $50 Billion Investment in AI & Supercomputing
Amazon revealed plans to invest up to $50 billion to expand its artificial intelligence and supercomputing infrastructure for U.S. government clients. The investment will begin in 2026 and includes the deployment of next-generation data centers equipped with advanced compute and networking technology.
The initiative aims to give federal agencies deeper access to AWS’s full AI suite:
• Amazon SageMaker for model training
• Amazon Bedrock for deployment
• Anthropic Claude
• Trainium & Nvidia AI chips
This expansion is designed to:
• Support U.S. leadership in AI innovation
• Strengthen cybersecurity, pharmaceutical discovery and other federal missions
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• Provide a secure, scalable infrastructure purpose-built for the U.S. public sector
AWS already serves more than 11,000 government entities, making this the largest AI-focused investment ever targeted specifically to the U.S. government.
3. Will the U.S. Approve Nvidia Chip Sales to China? Talks Are Underway
According to Bloomberg, the Trump administration is considering allowing Nvidia to ship its H200 AI chips to China—a major potential reversal of previous export-control policy.
What we know so far:
• Recent internal discussions suggest the U.S. may approve limited shipments of the H200.
• No final decision has been made.
• Approval would represent a significant concession to Beijing and soften current trade restrictions.
Such a move could dramatically reshape global AI competition and ease tensions in the U.S.–China tech standoff.
4. Alibaba Surges as Cloud AI Division Beats Expectations
Alibaba reported second-quarter earnings that surpassed Wall Street expectations, driven by accelerated growth in its AI-enhanced cloud division.
Highlights:
• Cloud intelligence revenue reached ¥39.82 billion, beating estimates of ¥37.99 billion.
• 🇨🇳 The company has invested heavily in AI infrastructure and model development.
• Alibaba’s U.S.-listed shares rose 3.9% pre-market following the announcement.
The results reinforce Alibaba’s strategy to leverage AI to strengthen both its cloud and consumer-facing businesses.
5. Google Takes the Lead in the Global AI Race with Gemini 3 Pro
Google shares jumped over 4% after unveiling major advancements in its AI technology, highlighted by the launch of Gemini 3 Pro and the new Deep Think mode.
Why this matters:
• Deep Think enables internal planning and advanced reasoning far beyond earlier models.
• Gemini 3 Pro delivered up to 93.8% accuracy in several high-complexity AI benchmarks.
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• Immediate integration into Google’s ecosystem boosts its highly profitable API business.
• Early tests show Gemini outperforming rivals in coding, math, science, and multimodal reasoning.
With Gemini 3 Pro, Google is positioning itself at the forefront of the next wave of high-performance AI systems.
