Inflation Cools, AI Financing Surge Drives S&P 500 to Record

The S&P 500 crossed 7,800 for the first time last week and closed at a record, powered by softer inflation data and a fresh wave of financing for the artificial intelligence buildout. The Nasdaq posted its third straight winning week. The Dow lagged, falling about 0.6%.

The consumer price index rose 0.1% in July, the Bureau of Labor Statistics reported Wednesday. The annual CPI rate eased to 3.4%, matching economist estimates. A day later, the producer price index came in unchanged for the month, below the 0.2% increase analysts had expected. The headline PPI stood at 4.7% year over year.

Treasury yields moved lower as traders scaled back bets on a September rate increase. By Friday, the CME Fed Watch Tool showed a 67% probability the central bank would hold rates steady at its next meeting, up from 55% a week earlier. The Fed's preferred inflation gauge remains above the 2% target, but the moderation gave markets room to focus on corporate developments.

Intel announced plans to sell $15 billion of common stock on Monday. Shares fell 4%. Strong demand let the company boost the offering to $20 billion the next day, CNBC reported. A regulatory filing later showed that CEO Lip-Bu Tan and a family member agreed to purchase a combined $12 million of the new shares. Jim Cramer, who manages the CNBC Investing Club, said the raise reflected management's confidence that customers would support the investment. He used Monday's dip to add to the club's Intel position and purchased 25 shares of memory maker Micron, which gained about 11% for the week.

Nvidia took a different approach. The chipmaker signed agreements with six large asset managers – Apollo Global Management, Blackstone, BlackRock, Brookfield Asset Management, KKR and Goldman Sachs – to create financing platforms for Nvidia customers, CNBC reported. The initiative aims to raise as much as $500 billion by turning graphics processing units into an investable asset class. Skeptics have questioned whether GPUs can support such financing because the chips have historically been viewed as rapidly depreciating technology. CoreWeave CEO Mike Intrator strengthened Nvidia's case this week, telling CNBC that older Nvidia GPUs are remaining useful longer than some investors expected. That could make the chips more attractive as collateral for lenders. Nvidia shares rose 0.5% for the week.

Goldman Sachs, which facilitated both the Intel stock offering and the Nvidia financing platform, ended the week flat. On AlphaScala's proprietary model, Nvidia scores 78, rated Strong. Intel and Goldman Sachs score 48 and 43, both rated Mixed, reflecting the market's weighing of capital needs against long-term opportunity.

The week showed how easing rate uncertainty can unlock large-scale risk-taking in technology. The next catalysts are August payrolls and the September CPI print, both due before the Federal Reserve's next decision.