Intel’s stock surged as the semiconductor industry witnessed a wave of valuation gains, thanks to Federal Reserve Chairman Jerome Powell’s remarks signaling potential interest rate cuts. While investors had been uneasy about Intel’s stock, grappling with concerns of equity dilution and lingering pessimism, Powell’s speech at the Jackson Hole conference hinted at softer conditions for rate cuts, offering a boost to the market. Notably, Intel led the chip sector’s surge, alongside competitors like Qualcomm, AMD, and Broadcom, each of which saw their shares rise by more than 2%. 
However, NVIDIA struggled as it faced reports of Chinese authorities discouraging local firms from buying its H20 GPUs.
During the conference, Powell acknowledged the imbalances in the labor market, with lower demand for workers creating tension. However, he emphasized the risks of inflationary pressures, especially stemming from tariffs, and cautioned that these could lead to persistent inflation dynamics. Despite this, Powell’s cautious optimism about economic conditions – highlighted by his suggestion that the Fed may adjust its policy stance – spurred a rally in stock markets. The S&P 500 and NASDAQ both rose significantly, driven largely by semiconductor stocks. Intel’s stock, which had been volatile, finally found some stability, jumping by 7% after Softbank announced a $2 billion investment in the company. However, this rally was tempered by reports about potential dilution risks related to CHIPS Act grants.
Despite the turbulence, Intel managed to close the week with a modest 3% gain. Meanwhile, NVIDIA’s shares, affected by the China sales concern, gained only 1.4%. The AI giant’s stock faced a downturn, dropping 2.7% for the week, while other chipmakers such as Broadcom, Qualcomm, and AMD saw gains as well, with Broadcom leading the pack with a 2.5% increase due to its exposure to custom AI chip design. Tesla, amid struggling vehicle deliveries, gained 5%, as investors hoped the possibility of lower rates might boost car sales.