Fed Flying Blind Ahead Of Rate Decision… And A Homebuying Bummer 10/28/25

0:02Live from the NASDAQ market site in the heart of New York City's Times Square, this is Fast Money. Here's what's on tap tonight. NVIDIA closing in on the$5 trillion mark. All the headlines from today's GTC event driving the stocks move and the groundwork it lays for the rest of mega cap tech. Plus, mounting layoffs. Amazon and UPS joining the growing list of companies cutting white-collar workers. What signal does this send to the Fed ahead of tomorrow's decision? And mortgage mayhem. Rates may have come down from recent highs, but one top housing economist says homebuyers should not expect further relief anytime soon.

0:34Historic warning is coming up. I'm Melissa Lee. Come to you live from Studio B at the NASDAQ. On the desk tonight, Tim Seymour, Bono and Eisen, Dan Nathan, and Guy Adami. We start off with that monster move in NVIDIA today. The semi-giant getting even more giant, pulling within a stone's throw of the$5 trillion mark. The stock jumping nearly 5 % and adding more than$230 billion to its market cap just today. That is nearly one whole Goldman Sachs. And the move coming is NVIDIA hosts its second GPU technology conference of the year, where it announced partnerships with companies from Nokia, CrowdStrike and Palantir to Lowe's and Uber.

1:08CBC's Christina Parks Nevelis spoke with NVIDIA CEO Jensen Huang this afternoon. She joins us from the conference in D.C. Christina. Melissa, can you believe that I was talking to a chip analyst who said, how long is it going to take for NVIDIA to hit$6 trillion? We're actually even talking about$6 trillion given$5 trillion is around the corner. We really saw NVIDIA shares going into this event, GTC, just up marginally, not even half a percent. but inch closer and closer to$5 trillion, really moving higher at the end of the keynote after Jensen did say, or I should say, cumulative demand for Blackwell and Rubin chips had reached$500 billion in orders through calendar 2026.

1:46And that doesn't include their networking business. So that could be major upside to street numbers that doesn't necessarily even include China. So that$500 billion in orders for Rubin and Blackwell, maybe we'll get China out of this trade talk deal. And so all of that is being taken as a really bullish sign that demand is moving ahead of expectations. Could also be a good sign for CapEx spend and a read on hyperscalers moving into the numbers just on Thursday. NVIDIA, like you said, announced many partnerships. Uber, Department of Energy, they're building seven supercomputers. CrowdStrike, Nokia.

2:20I was able to catch up with, like you said, the CEOs of NVIDIA and Palantir to discuss their partnership and how it's going to move just beyond data analytics and chatbot answers and towards real business decisions that can be made with or without AI. And, of course, that's scary to think about. Here's their answer. What's very, very special, I believe, about our partnership is we're going to be able to move 2x, and I think in the future, even faster. So you get a much, much faster, and actually because you can control it in a more granular way, much faster, much cheaper. And then the macro thing that I'm actually most excited about, which for our country is because of that you can do manufacturing in America.

2:59So they're working together. The example they gave is Lowe's, for example, that you would create a digital replica of your entire business, a working environment, and the AI systems can make decisions on behalf of you. And that seems to be the way that we're going with agentic AI and individuals, you know, making decisions based off of me, and then the same thing within the business world. But I think the major takeaway is that demand is really outpacing supply at the moment, and hence that$500 billion number. And then also the positive comments around China, even though the talks haven't really happened.

3:30It seems like even the Department of Energy secretary was saying that he expects, he feels very optimistic. And that was a quote just moments ago with journalists. So perhaps they're alluding to something we don't know just yet, but it could be positive read for a lot of tech names going into the end of the week. Right, and Jensen Huang has really been playing into President Trump's, you know, goals here. I mean, he moved the whole conference to D.C., correct, with the hope that the president would actually join. Obviously, the president is already occupied. Two big things to that. He ended his GTC speech with Make America Great Again.

4:07And then he ran up. So there was a lot of candid moments with him on the floor here. And he did say when he was with the panelists that he had GTC here in D.C. with the hopes that President Trump would be here. But President Trump obviously is busy, you know, you know, with the China trade talks. But Jensen Wang, he is going on a plane. He is heading to Korea. He wouldn't share any details as to which Korean leaders he'll be speaking with. There are some reports from Bloomberg that possibly there's going to be a new deal with Samsung. And so perhaps we'll be getting more information. But they're very, very confident.

4:42And there's been a lot of, you know, chats about how great the president is, how great the administration is in really bringing back jobs here and building out infrastructure. And they're going to get rid of the red tape when it comes to power. Even when I ask the questions about nuclear, like nuclear building a reactor takes years and years. You can't just do it like that. So how are we going to get all of these megawatts capacity out there? And they seem to think that the White House and all of the officials are really going to get on board and move things up. Yep. Christina, thank you. Christina Partsenevolos in Washington, D.C., for us.

5:14Jensen Huang is seemingly doing everything right. I mean, short of gifting President Trump a golden GPU, he is courting the president in terms of echoing some of the sentiment that the administration has regarding manufacturing in America, etc., and then also making all these partnerships, which seems to be the way to put market cap onto your company these days. Inc. a partnership, and the rest will follow. Well, he even referred to it as a virtuous cycle. And so what is called, today was called unofficially the Super Bowl of AI. You know, all the companies, whether it's Palantir, CrowdStrike, you know, you name it, these are the companies that certainly will be part of it.

5:54And what we've already learned about NVIDIA over the last, call it two months, is that they really are an AI infrastructure company and the way they are investing and the way these deals have seemed somewhat circular in nature. Just getting to the numbers that we got that the analyst community now is scrambling over and what it means for valuations. And a 4 % move in NVIDIA is probably the bigger move we've seen in NVIDIA in a long time. If you read at least some of the analyst reports that I'm getting, what's been implied by this$500 billion or half a trillion number is a lot of the street was somewhere between Blackwell and Hopper, somewhere around$350 to$400 at the higher end.

6:31So it means what we heard today is probably some increase of anywhere from 25 % to 50 % on what the street was expecting in terms of shipments between now and the end of 26. That's extraordinary. NVIDIA has always been this story where we've all known it was extraordinary. It was just how much more extraordinary. I think today was more extraordinary. 100 % Tim's right. And you mentioned his, he has a fiduciary responsibility to his shareholders. And he's doing it extraordinarily well. So good for him. Making deals, currying favor, all those things. Problem I've had incorrectly has been, you know, price to sales.

7:04Now, you said$5 trillion. Let's round up. I mean, this is a company now that's approaching 19 times revenue, which is a big number at this mature of a company, I think. But people say it's a new paradigm that will grow into that revenue. We shall see November 19th with this market move. That's when the report is going to be a fascinating day. Yeah. You know, it's also interesting that clout that Jensen now is having, you know, when the president threatened send troops to San Francisco. Jensen was one of the CEOs that got him on the horn, and he stepped back from that. And so, you know, we talk about this transactional nature that this administration has with business, and I think that's a great example of it.

7:41You know, the one thing I'd say about NVIDIA, and Mel, you just said that, you know, one way to add market cap to your company is do a deal with them. Well, Uber closed down in a day. Palantir actually was unchanged on the day. And at some point, it's not going to be that exciting to do a deal with them that's on the come in the future. And I think, you know, there's been hundreds of companies that NVIDIA has invested in over the last few years. And a lot of those investments have to do with these companies. That was the Uber deal of buying these chips. So when you get this half a trillion dollar number and this company is expected to do, let's say, 300 billion dollars in sales next year, you have to start scratching your head a little bit whether we're getting a little too far over our skis.

8:17And then the other thing about this circular nature of all this investment and then they buy the chips back. You know, this is becoming very financialized. It used to be you sell a product, someone buys the product, they put it into work, they get a profit from it. If it goes really well, then they buy your next product, right? So you think about it now, a lot of the financings and all this stuff that's going on in and away from NVIDIA, too, there is a lot tied into this one name right now that used to not be it. It was a single play on the build-out of this theme, and then we had the hyperscalers.

8:45But now it's moving all over the place, and it's infected the markets, and there is risk to that. There is risk that people are saying$5 trillion is going to be$6 trillion really soon. And I just can't find anybody who thinks that there's some danger to this for the broad market, not just this name in particular. Yeah, I have a hard time arguing with that point. You mentioned two terms. As much as I'd like to. Circular and financial engineering. And I do want to acknowledge that there is a fair amount of that going on. With that said, I think I view it through the opposite lens. The knock on NVIDIA coming in was that it was a hardware company, that it would be subject to cyclical nature and pullbacks.

9:21And what they've done, and it was somewhat self-serving likely, but what they essentially said was, listen, we want to push into China because we want the world building on our technology, American technology and NVIDIA's technology. And all they've done is essentially replicate that within the United States. They are now on the public and private side with this Palantir deal. They have backed Circle and the neocloud companies. There is no way to continue to build up without being on the CUDA stack, whether it be the individual chip. They have found a way to spread their tentacles, if you will, into all of the different facets of AI.

10:01And that is why I think that maybe the$5 or$6 trillion number might actually be too low. There seems to be no way to push forward into AI. and we were worried about what their role would be within agentic and inference AI. And now they've kind of leapfrogged themselves into a leadership position in that next wave. And so it is circular, and I want to acknowledge the risk that you're putting out there, but it essentially guarantees that they continue to be at the very center of this AI flywheel. So Guy's argument about 19 times sales, you're not worried about that. You're not worried about valuation at this point.

10:34You think that NVIDIA has the lock on this. You can't not be worried about valuation. I just think that that can't be the only thing that cues your investment thesis. For one, it's still a, what is it, a 60 % gross margin business. So like a price to sales number doesn't tell you the same from one company to another, depending on what their margin makeup is. I mean, that, yes, I will acknowledge it. I think it's, you can never get too far offside. You can't just be a bull and not acknowledge the risks that are there. I'm just saying that they have now laid out a plan for how they will grow into those revenue and P.E.

11:11I mean, again, the price to sales multiple is what it is. I'm not sure even what the sales multiple is, and I'm not sure how far out we're calling for it. But the nice thing about NVIDIA is we do have benchmarks all along the way. And these next couple of quarters of numbers, you know, without necessarily having to go out into the black hole of infinity and the unknown, is I think this is a company that's going to be trading probably inside 30 times on a P.E. basis with a margin profile that still is extraordinary, with a growth profile that's extraordinary. You don't have to go out to, hey, what's this really going to be?

11:43Now, today we got numbers that, again, we don't know, but we'll probably in the next couple of days know whether these were through 26. We can now begin. And Guy's number may be absolutely right. I haven't done that math. He's much smarter in math than I am. Well, it's a math in college. At Georgetown. Yeah, he took. I didn't know they had math at Georgetown, but other smart kids were taking it. So I'm less worried about the multiple, especially an earnings multiple for a company that right now has the ability. And when you're saying this, I mean, they've ultimately inserted themselves into the middle of the industry.

12:15And whether it's they've gone from hardware to platform to software to all of it, they're in the middle. I guess the bull case and the bull case has been the right case, by the way. But it hinges on the fact that there's such a head start that competition is not coming in a meaningful way, which is why they will join the 74 percent margins and not in perpetuity, but for a foreseeable future and why that revenue number, they can grow into that valuation. Now, if competition does come, that obviously changes the entire narrative. And we've seen different times over the last year, year and a half, where there have been glimpses of that.

12:50Obviously, nothing has taken hold. But at least in my history of just watching things, when you have margins, it's like Amazon says, your margins are my opportunity. And somebody out there is looking at this. Right. Well, real quickly, we had Dr. Karpon. You just saw him, right? CEO of Palantir. This is a company that trades at 100 times sales. So if you're not worried about 19 times sales, this is a company that's going to do maybe$4.5 billion in sales this year, maybe$5.5 billion next year. Half of that is probably AI-related. OK, on their their platform there. So when you think about a company being assigned a 450 billion dollar market cap for doing five billion dollars in sales and telling a nice story and showing up, you know, next to Jensen anywhere he pops up, it just seems like we are in a market right now that will be unforgiving if there's the least bit of slowdown or demand for this thing.

13:37It's so supply constrained. All right. Meantime, the Fed flying blind to tomorrow's right decision, the market pricing and near certainty for a quarter point cut, even with no official jobs data thanks to the nearly month-long government shutdown. But there is piecemeal evidence of an employment market under some pressure. Amazon today officially announcing it is cutting 14 ,000 jobs. UPS saying it's slashed payrolls by 48 ,000 this year. They joined names like Target, Meta, Starbucks, and more who've culled their workforces. The market's betting those job cuts are enough to prompt Fed cuts through the end of the year.

14:09Major indices setting intraday records today yet again. So is that the right read on the headlines? I mean, but we've also heard from J.P. Morgan's Jamie Dimon, who basically has told managers not to hire people. Let's see how AI impacts every part of our business, because we know we're implementing AI in every part of our business. Maybe we can do more with less. So this doesn't really bode well for job seekers. No, definitely not. And again, I'm one of the people that think incorrectly, but I think the unemployment rate is going to move in a measurable fashion higher over the next couple quarters.

14:42and we will get data at some point. And, you know, people will say that's a good thing for the market because it puts the Fed in play. There are some people, by the way, that think there's a chance for 50 basis points of cuts tomorrow. I am not one of those people. With all that said, we're in the sweet spot now where job losses and the unemployment taking higher is a good thing. At some point, though, that pendulum swings the other way. At some point, bad news is bad news. If we get 50 bips tomorrow, insanity lives. and because we don't have an economy or a job market that is indicating this.

15:14And throw in liquidity dynamics. Because we're not getting data. Well, we're not getting data. And it hasn't trickled through to data yet. But anyway, we've lost a month of data, and we're going to say the data we would have gotten tomorrow or we should have gotten last month was data from a month before. Concurrent, we're hearing from companies. We have some sense of where the economy is. The regional Fed surveys offer a lot. I think you just get back to a place where, yes, traditional measures of the relationship between the unemployment rate or the rate of change in the unemployment rate, whether we're talking Psalm rule guy.

15:46Oh, yeah. Or whether we're talking Taylor rule, whether there's a lot of good rules out there that we learned in business school. And it may, in the context of the AI conversation we just had, mean that the economy is in a great place, but we don't know what the unemployed consumer who had a, just call it a mid-office job. I'm not trying to characterize it one way or the other. I'm talking about the kind of job that seems to be most in jeopardy here, and we don't know the impact. Right, and those are the consumers that are still spending at this point in time, or the data is showing us that there is spending on that level.

16:20So when you're hearing about corporate jobs being called, that is a concern. I think it's a concern. But again, as long as the consumer continues to hold up and spend and deleverage, then I think then you kind of are in a, I'm not going to call it a Goldilocks situation, but it still pushes out, I guess, the worst case scenario. Going into the Amazon and UPS layoffs that you mentioned, I think those tell two completely different stories. I think UPS is one of the whole good situation, you know, pull forward that we had in 2022, 23 on the back of the pandemic. I think that's reverse course. And, you know, you the volumes aren't there to support that workforce.

16:57I think on the Amazon side, I think perhaps essentially we should be reading through. We were just talking about NVIDIA and CapEx spend. I think this is very supportive of that. They're essentially saying we want to make sure that we can continue to make this investment. This is where we see the highest potential ROI. And we want to still show that we have some capital discipline to our shareholders. And the best way for us to do this at this present moment is this. Stack that up against an unemployment backdrop that is deteriorating somewhat. They will be able to go back and pick the best people for those particular roles if they so need.

17:32So that may be something that pivots, but I think that those do tell two different stories, one being very supportive. I mean, I think that there's a sort of a tradeoff. It's like you can cut some jobs, but you may still make gains in productivity. How do you weigh that? You know, how does that shake out for more on tomorrow's Fed decision? Let's bring in Evan Brown of UBS. He is the head of multi asset strategy. Evan, great to see you again. What do you make of where we are in the markets right now, given the backdrop we just laid out? Yeah, I mean, I think it's it. First of all, it's a strange economy right now.

18:02We're talking about that GDP is quite strong, but the labor market is soft. And we're waiting to see how that will evolve. But the soft labor market is what's getting the Fed to cut. And just history shows when the Fed is easing and the economy is holding up and earnings are strong, that's some of the best returns that you get in equities. And so I think it's kind of keep it simple. This is a good environment for stocks. Evan, what level does the unemployment rate become problematic for the markets? Forget about the Fed because they're focused on it. Yeah, I don't know that it's a particular level.

18:36It's the speed, right? And, you know, we still have a pretty low overall level of unemployment, 4.3%, we think, because we're not getting the data at this point. But if we start seeing the speed pickup, if we start seeing initial jobless claims spike, and we are at least getting the state-level data there and it doesn't look too concerning, then then I think we're in OK shape. Evan, today was a day when in terms of asset allocation, you had equal way to do nothing. In fact, be down. Most of the S &P was down today. And and so we're at a place just kind of curious how you're kind of advising across this this, you know, this big umbrella that you see and that you have to advise into.

19:14Is it to lean heavier into the stuff that's working? Is it to find some value in the relative value cases? You know, there's been a health care resurgence. So how are you viewing this? And, you know, as always, we talk about breadth or lack thereof. And it's easy to get concerned on a day like today if you want to find that side. Where do you sit? Yeah, I think for the most part, we're leaning into what's working. I mean, I think there are some sectors that where you're seeing the earnings and are not being rewarded to the same extent like financials. We're overweight there and we think we're going to get going again.

19:45But with the momentum that we're seeing in tech, I don't think you want to fight that. And we'll be getting a lot of earnings coming soon. and we'll see how they come out. But it's looking pretty good on that front. You are looking for other ways, though, to play the AI theme. And you're saying to look at China, which is interesting. Yes, definitely. So, I mean, China is just, A, it's a lot cheaper way to play a theme, less crowded. But also, it's a different kind of approach to AI. Here in the U.S., we're trying to build the greatest model possible and reach superintelligence and all this. Whereas in China, it's, you know, whether it's by choice or just limitations in terms of not having the same access to the chips, they're focused on efficiency.

20:28And they're more focused on, OK, what are the immediate applications right here? And I think there's something to be said for that. So going back to the jobs thing and the stock market performance, Derek Thompson, who has a great sub stack, had a chart that he was saying the scariest chart in the world. So October 22, ChatGPT is launched, stock market's up 70 percent from there, job openings are down 30 percent. Now, you don't have to say that's all because of GPT. This thing hasn't been useful probably for just until the last year or so. But how are you guys thinking about that? Because we're talking about these job cuts, you know what I mean?

21:01And eventually we're going to see a level of productivity because the tools are good enough. But right now, doesn't there seem to be a big divide between what the market is willing to suggest productivity is going to be and then this job opening situation? It's very tricky. I mean, on an individual stock level, you hear these companies, they're doing layoffs and people are saying, OK, that's good for margins. Stock goes up. But if this keeps building up, clearly you're going to have a problem. And because that's going to hit the top line of people lose their jobs and that's going to weigh on spending.

21:33And so we're just, you know, we're not trying to predict. I don't think anyone can predict exactly what's going to happen here in terms of just how much productivity we're going to get. I do think that this is going to create at some point some meaningful public policy conversations of, OK, there are a lot of people who are out of work because of these AI tools. What are we going to do about it? Is there going to be talk about redistributing income? And, you know, that time might actually come sooner than we expect, given what we're hearing right now. Evan, thank you. Great to see you. Before we go, can I just say something about Evan?

22:07First of all, UBS is lucky to have him, number one. Number two, last time he was here, we had a Peter Frampton conversation. Evan was not familiar. He does. Because you know what happened? The next day, he texted me and said, I'm listening to Peter Frampton. I am not surprised. Great stuff. By the way, which is why UBS is happy to have him. Because, I mean, this is a guy that goes back and does his work. Recognizes, by the way, where he was wrong. And not having listened to Peter Frampton coming in. He wants to better himself constantly. And that's important in life. Great call, guy. Thank you, Tim.

22:36Evan, again, thank you. Thanks a lot. Coming up, we are getting ready for Thursday's meeting between President Trump and Xi and bringing you the latest headlines from Trump's Asia tour. Plus, checking out in on ChatGPT how OpenAI's team is with PayPal to bring its digital wallet to the chat bot. Don't go anywhere. Fast Money is back in two.