Tesla and Alphabet Ignite Wall Street Ahead of Crucial Fed Decision Summary

Markets in Rally Mode - But for How Long?

Wall Street opened the new week with renewed optimism.

The Nasdaq led the charge with a near 1% gain, helped largely by two tech powerhouses: Tesla and Alphabet. While the Dow Jones crawled ahead with just a 0.1% uptick, sentiment across the board was upbeat—at least for now.

That optimism might be short-lived, however. The real test looms on Wednesday when the Federal Reserve announces its latest interest rate decision.

Market watchers are betting heavily on a 25 basis point cut, with some even speculating a more aggressive 50 bps slash. The real kicker? It’s not the decision itself, but how Chair Jerome Powell frames the Fed’s future policy path during his post-announcement press conference.

Alphabet Smashes the $3 Trillion Mark

Among the standout names, Alphabet (GOOGL | +4.3%) surged to $251.61, pushing its market cap beyond the $3 trillion threshold, joining an elite club with Nvidia, Apple, and Microsoft.

Fueling the rally was a bullish upgrade by Citigroup, which raised its price target from $225 to $280, citing Alphabet’s dominant position in AI through its Gemini model and AI-enhanced Google Search features.

Add to that a favorable court ruling earlier this month - no forced divestment of Chrome - and you’ve got a stock that’s firing on all cylinders.

Elon Musk Buys the Dip, Sends Tesla Soaring

If Alphabet impressed, Tesla (TSLA | +3.56%) electrified. Shares spiked as high as $420 during the session before closing at $408. This came on the heels of a massive insider buy: Elon Musk purchased 2.57 million shares, worth approximately $1 billion, according to SEC filings.

This marks Musk’s first open-market purchase since 2020, and comes after he reportedly re-committed himself to Tesla following his exit from Trump’s budget team earlier this year.

Investors viewed the move as a strong vote of confidence, propelling the stock higher for a third consecutive session. Tesla is now up 85% since its April lows, effectively erasing its 2025 losses.

TikTok Takeover? Oracle in the Spotlight Again

The TikTok saga is entering a new phase. President Donald Trump hinted on Truth Social that a deal is imminent to sell TikTok’s U.S. operations ahead of the September 17 deadline.

One name consistently popping up? Oracle (ORCL | +3.41%), which already provides cloud infrastructure for TikTok.

Reports from Bloomberg suggest a possible buyout consortium that includes Oracle, Blackstone, and Andreessen Horowitz. Investors are clearly pricing in a potential windfall, pushing Oracle shares higher by over 3%.

CoreWeave Lands $6.3 Billion Nvidia Deal

Another name that caught my attention was CoreWeave (CRWV | +7.6%), the fast-growing cloud services provider. The stock jumped 7.6% after announcing a massive $6.3 billion cloud computing deal with Nvidia (NVDA).

Under the agreement, Nvidia is contractually obligated to purchase any unused CoreWeave capacity until 2032.

It's a win-win scenario: CoreWeave secures guaranteed revenue, while Nvidia ensures cloud access to power its ever-expanding AI operations. For a company that's rapidly becoming an AI infrastructure darling, this deal solidifies CoreWeave’s position in the big leagues.

Corteva Sinks on Split Rumors

But it wasn’t all sunshine and rainbows. Corteva (CTVA | -5.68%) took a beating after The Wall Street Journal reported that the agricultural giant is considering a breakup of its seeds and crop protection units.

Investors didn’t take the news well. The market clearly sees more uncertainty than upside in spinning off two core business lines, especially at a time when margins in the agri-sector are under pressure.

Unless Corteva comes out with a clearer strategic vision, the stock may continue to face headwinds in the near term.

Macro Watch: A Dovish Fed or Political Puppet?

While Monday’s calendar was light on economic data - the Empire State Manufacturing Index came in deep negative at -8.7 - investors were already shifting focus to Wednesday’s rate decision.

Beyond the numbers, there’s increasing scrutiny on the political pressure facing the Fed, particularly after the failed attempt by the Trump administration to remove Fed governor Lisa Cook ahead of the vote.

At the same time, Trump scored a win with the Senate confirmation of Stephen Miran, a known loyalist, as a new Fed board member. With the central bank now walking a tightrope between fighting inflation and fending off political interference, the credibility of the Fed is more in play than markets might like to admit.

Oil Up on Geopolitical Tensions

In commodities, oil prices rose 1% to $63.30 per barrel after fresh Ukrainian drone strikes targeted Russian refineries. Trump’s remarks that he might sanction Russia if NATO allies don’t cut oil imports added fuel to the geopolitical fire.

All this while the euro crept up slightly to 1.1766 USD, and Treasury yields eased.

Final Thought: A Calm Before the Fed Storm

The market may be climbing on hopes of a dovish Fed pivot, but I’d caution against overconfidence.

Between TikTok drama, Musk’s bold move, and creeping political interference at the Fed, the stage is set for a week packed with volatility. My eyes are firmly on Powell’s tone, because, as always, the devil will be in the details.

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Kristoff - ChartMill

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