A Fed Governor Leans Toward A Hold As Nvidia Buys Hugging Face

Brian CurcioPublished September 3, 2026

A Federal Reserve governor said Thursday he could back leaving interest rates where they are this month, and government bond yields eased on the words. Nvidia agreed to pay $12.9 billion for Hugging Face, the main hub for openly shared AI models, while Broadcom's stock fell despite a record quarter. Oil stayed elevated after Iran struck Kuwait, and the governor was careful not to rule out a rate increase if inflation runs hot.

Fast Facts

Snowflake shares jumped 22% after the data-software company beat expectations and pointed to momentum in its AI tool for writing software code (Read More)
Victoria's Secret headed for its worst day in more than a year after strong bra and Pink sales still fell short of what Wall Street wanted (Read More)
A dividend cut and a weak forecast for the year ahead: Campbell's is steering cash toward paying down debt after fourth-quarter revenue fell more than analysts expected (Read More)
Boeing's $8.4 billion purchase of Spirit AeroSystems has turned up large liabilities the company had not originally identified (Read More)
Average 401(k) and IRA balances hit record highs in the second quarter, but more workers are pulling cash out of their retirement accounts, according to Fidelity (Read More)
An outage Thursday morning knocked ChatGPT, Claude and Grok offline at the same time, according to the outage tracker Downdetector (Read More)

Global News

Kuwait's army said it was confronting missile and drone attacks from Iran on Thursday, continued escalation in the U.S.-Iran exchange of strikes that began Aug. 30-31 (Read More)
The Dutch central bank is moving 78 metric tons of gold, worth about $11 billion, from New York to London, citing geopolitical unrest (Read More)
Panama Canal authorities are cutting daily ship transits because of low water levels, just as the Hormuz crisis pushes more oil shipments toward routes through the Americas (Read More)
Growth in the eurozone's services sector slowed to a two-month low in August, though overall private-sector activity held steady and hiring picked up (Read More)

A Fed Governor Said He Could Support A Rate Hold, And Yields Eased

Fed Governor Christopher Waller said Thursday he would support leaving interest rates alone at the Federal Reserve's Sept. 15-16 policy meeting, so long as the next two weeks of data keep showing disinflation, meaning prices still rising but rising more slowly. He did not close the door on the other direction: if inflation comes in hot, he indicated, a rate increase cannot be ruled out. The baseline is what makes that newsworthy: the fed funds rate, the short-term rate the Fed sets and the one most other borrowing costs are built on, has been parked in a target range of 3.50% to 3.75% since a quarter-point cut on Dec. 10, 2025. Waller's tone was more dovish, meaning leaning toward lower rates, than Chair Kevin Warsh's at Jackson Hole on Aug. 28.

Markets moved on it. Stocks opened higher Thursday and Treasury yields retreated during the session, according to the Wall Street Journal. A yield is the annual return a government bond pays at its current price, and yields fall when buyers bid bond prices up. The official Treasury curve has not caught up: as of Wednesday's close on Sept. 2, the 10-year yield stood at 4.79% and the 2-year at 4.39%, both unchanged from Tuesday. Thursday's retreat is an intraday move reported by the Journal, not a closing level.

One conditional sentence moves prices because of what the 2-year Treasury yield is. It tracks where investors think the Fed is heading over the next couple of years, so anything that lowers the perceived odds of a hike also lowers the short-term rates the market expects, and the yield drifts down with it. Stocks respond through a second channel. A share price is a stack of future profits valued in today's dollars, and the rate used to discount those future dollars comes off the same expectations; when that rate falls, profits arriving in 2029 or 2032 are worth more today, which is what a higher open reflects.

Three things sit against all of that. Brent crude, the global oil benchmark, traded above $96 a barrel Thursday and is up more than 7% this week after Iran struck Kuwait, per CNBC, and costlier energy pushes inflation up rather than down, which is precisely the risk Waller left himself room for. Friday morning brings the August jobs report, and forecasters are unusually far apart on it. A governor's conditional view is also not a committee decision; the vote is still two weeks away.

Sources: CNBC on Waller · Economic Times · WSJ · CNBC on oil · Kiplinger · Rapunzl on Warsh at Jackson Hole

Nvidia Is Paying $12.9 Billion For Hugging Face, Where AI Models Get Shared

Nvidia confirmed Thursday that it will buy Hugging Face for $12.9 billion, or $12.93 billion by TechCrunch's count. Roughly $11.9 billion of that is cash to Hugging Face stockholders, with up to $1.0 billion set aside as retention equity, meaning stock granted to employees who stay on at Nvidia. CNBC reported that Hugging Face's chief executive approached Jensen Huang, Nvidia's chief executive, weeks before terms were finalized. It is the second-largest deal Nvidia has done, behind a $20 billion licensing deal with the chip startup Groq.

Nvidia sells the chips. Hugging Face is where the software that runs on those chips gets shared: three million models and half a million datasets, used by more than 18 million developers. Much of it is open source, meaning the model files are published for anyone to download and run themselves instead of renting access from the company that built it. Owning that distribution layer keeps developers close to Nvidia hardware at a moment when closed-model AI companies such as Anthropic and OpenAI are working to reduce their reliance on Nvidia GPUs, the graphics chips that do most of the math behind AI. In an Nvidia blog post, Huang said that Hugging Face will stay an "open platform," one anyone can build on without permission, and that Nvidia compute "will not be required" to use it.

For a student or a teacher who has downloaded a free model from Hugging Face for a class project, nothing changes now. The deal is expected to close in the first half of 2027, and the two companies run separately until then. What is worth keeping is Huang's promise that the platform stays open, on the record and specific enough to check later.

Sources: CNBC · TechCrunch

Broadcom Posted A Record AI Quarter And The Stock Fell On Its Forecast

Broadcom's numbers, previewed here yesterday, landed after Wednesday's close. Revenue for the third quarter of Broadcom's own accounting year, the three-month period that ended Aug. 2, 2026, was $29.6 billion, up 86% from a year earlier, with AI semiconductor revenue of $16.7 billion, up 221%. Earnings per share, the company's profit divided by its shares outstanding, was $3.32 on an adjusted basis. Broadcom's revenue guidance, its own estimate of coming sales, is about $34.8 billion for the fourth quarter, up 93% from a year earlier, including $21.7 billion from AI chips, up 236%. The stock fell, MarketWatch reported, with attention on the forecast rather than the beat.

A share price already reflects what investors expect a company to earn, so what moves it is the distance between the result and the expectation. When the bar is high enough that only a beat on every line clears it, traders say a stock is priced for perfection, and a forecast that is merely very good becomes a reason to sell. One analyst quoted by MarketWatch read the guidance as management being cautious rather than as a signal of weakness. The $21.7 billion figure says Broadcom expects AI chip orders to keep climbing into the fourth quarter.

Sources: Broadcom · MarketWatch · CNBC · Rapunzl on yesterday's Broadcom preview

What To Watch

The earnings figures below are analysts' average estimates for earnings per share, not results, and the actual numbers can land well above or below them.

Friday's jobs report:

The Bureau of Labor Statistics is expected to release the August jobs report at 8:30 a.m. ET Friday. Economists surveyed by Kiplinger expect about 58,000 jobs added and an unemployment rate holding at 4.1%, but the individual forecasts in that survey run from a 25,000-job decline to an 80,000-job gain, which is a wide range for one month. It is the last major reading on hiring before the Fed meets, and a number at either end of that range would change how Waller's conditional sounds.

Reporting after the close today:

lululemon (LULU) is expected to report at $1.79 per share against $3.10 a year ago.
Zscaler (ZS) is expected to report at $0.06 against a loss of $0.04 a year ago.
DocuSign (DOCU) is expected to report at $0.44 against $0.32 a year ago.
Guidewire (GWRE) is expected to report at $0.49 against $0.62 a year ago.
Samsara (IOT) is expected to report at $0.02 against a loss of $0.03 a year ago.
UiPath (PATH) is expected to report at $0.04 against $0.01 a year ago.

Also on the calendar:

The Fed's next interest-rate meeting is scheduled for September 15 and 16, with a press conference expected at 2:30 p.m. ET on the 16th. Between now and then, listen for whether other Fed officials echo Waller's conditional hold or Warsh's harder line; the gap between the two is the story of the next two weeks.
The Fed's monthly consumer credit report, which tracks how much Americans owe on credit cards and car loans, is expected on September 8.