AI Rebound Lifts S&P, Dow to Records on Weak Jobs Report
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- S&P 500 and Dow closed at records this week, gaining 3.6% and 3% respectively, while the Nasdaq rose 5.2%, as AI stocks rebounded from last week's forced liquidation of Leopold Aschenbrenner's Situational Awareness hedge fund.
- The July jobs report showed nonfarm payrolls unexpectedly fell by 23,000, prompting traders to price a 55% probability the Fed holds rates unchanged at its September meeting, up from 45% on Thursday per the CME FedWatch tool.
- Nvidia jumped more than 11% for the week — its best weekly performance in over a year — after Elon Musk said SpaceX will build its AI infrastructure "exclusively on Nvidia," citing the Vera Rubin architecture as "the best AI computer."
- SpaceX dropped 13% Wednesday after reporting better-than-expected revenue but Q2 capital expenditures of $18.4 billion, then recovered to finish the week up 23% after successfully navigating its first IPO lockup expiration.
- The iShares Semiconductor ETF (SOXX) gained 7.6% for the week, more than double the Dow's 3% rise; Corning was the portfolio's best performer while AMD slipped 7% despite solid quarterly results.
- The portfolio added to Corning (upgraded to buy-equivalent 1), Intel, and Johnson & Johnson using Dover sale proceeds, exited Honeywell Aerospace after a guidance cut, and trimmed CrowdStrike (~146.5% gain) and Palo Alto Networks (~172% gain) near price targets.
Why it matters: The unexpected -23,000 July payroll print materially shifted Fed expectations toward a September hold, which Cramer argues was the trigger for AI infrastructure names to rebound from last week's forced selling. Musk's exclusive endorsement of Nvidia sent its stock up 11% while AMD dropped 7% on solid earnings — showing the market still treats AI chip competition as zero-sum despite robust infrastructure demand.
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