Good morning!

We finally got a rate cut last week, spurring the markets to more record highs on Friday. This week, the Fed will be eyeing September numbers from its preferred inflation gauge, with another cut in October riding on the data. Here's what's happening ...

• Investors are awaiting Friday’s release of the Federal Reserve's preferred inflation gauge, the PCE (Personal Consumption Expenditures) price index. Wall Street anticipates the data will show that inflationary pressures persist but remain moderate enough to keep the Fed on its current policy path. Core PCE, which excludes food and energy, is expected to have risen 0.2% in August, down from 0.3% in July. On a year-over-year basis, the core measure is projected to hold steady at an elevated 2.9%. *

• Costco’s hot streak earlier this year has cooled—shares are down nearly 12% since February’s peak. But with solid growth, predictable earnings, and fiscal Q4 projections showing an 8% revenue bump and 12.6% profit gain, investors still trust the brand. That trust will face a test after Thursday’s earnings report. Walmart’s stock is outperforming, thanks to its aggressive online push, while Costco’s slower digital rollout is strategic. Its membership model and treasure-hunt shopping experience keep customers loyal, even in a tough retail climate. **

• Yesterday Nvidia announced plans to invest up to $100 billion in OpenAI, backing a massive buildout of data centers to train and run next-gen AI models. The companies signed a letter of intent to deploy 10 gigawatts of Nvidia systems—enough juice to power millions of homes—as part of OpenAI’s expanding infrastructure push. This move could help OpenAI ease its dependence on Microsoft, which has been its biggest investor and cloud provider. Since Microsoft loosened its exclusivity terms in January, OpenAI has been busy teaming up with other players like Oracle, SoftBank, and Stargate. Nvidia says its investment will complement those partnerships, positioning itself as a key computer and networking partner going forward. ***

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