r/Stocks investors split over AI-buildout risk as rally runs through rate hikes and war
In back-to-back daily discussion threads, retail traders debate whether a Nasdaq-led rally is justified given rate hikes, inflated earnings, and an ongoing war disrupting oil shipping.
What to know
- The Nasdaq/QQQ jumped roughly 3% the day after the Fed's latest rate hike even as the 30-year Treasury yield approached 5.4% and diesel hit an all-time high.
- The S&P 500's headline Q2 earnings-beat rate (39.3%) is largely driven by Alphabet's one-time $98 billion GAAP gain; excluding it, the beat rate drops to 12.6%.
- Commenters disagree sharply on risk: bears cite slowing data-center construction, rising AI-buildout costs, and war-driven disruption to oil shipping as ignored dangers; bulls point to strong guidance and the market's long-run upward trend.
- Some traders link the rally to hopes that a divided Congress after the midterms would force an end to an ongoing war and cap oil/refiner profits, though others doubt Congress has the votes or power to compel that outcome.
The dispute Whether the market's confidence reflects genuine economic strength and manageable risk, or is wishcasting that ignores AI-buildout strain, inflated earnings, and an unresolved war. · positions read across 172 posts and comments
The market always rises over the long run, so staying invested regardless of short-term risk is the correct strategy.
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“When will people learn that the market goes up. It will always go up, literally forever.”
macbowes · Reddit ↗
The rally is ignoring real headwinds: AI-buildout cost inflation, weak free cash flow, and earnings quality distorted by one-time gains.
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“The AI buildout is driving markets higher. But there are numerous headwinds to this buildout the market is straight up ignoring.”
jrex035 · Reddit ↗
History shows crashes are the norm, not the exception, and current calm is propped up by government/central-bank intervention that won't last forever.
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“This whole "market only goes up" thing is an extremely recent phenomenon (since the 2008-9 crash). Huge crashes were the norm historically speaking.”
jrex035 · Reddit ↗
Political outcomes (midterms, a divided Congress) could force an end to the war and change the market's risk calculus, though how much power Congress actually has is disputed.
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“My guess is it's in anticipation of a blue sweep across both houses of Congress. They'll likely force a deescalation and end of the war.”
richizy · Reddit ↗
Federal Reserve US central bankAlphabet S&P 500 company reporting Q2 earnings
Donald Trump President, referenced in war/policy debate
John Fetterman US Senator referenced in midterms discussion
How it unfolded 4 developments, newest first · click a bar or a number to jump postscomments
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r/Stocks daily discussion continues into Tuesday session
A new daily discussion and technicals thread for Tuesday, September 22 opens, continuing the same running debate over rate hikes, earnings quality, and the AI buildout.
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CGNX getting hit on the news, but actually seems bullish for the company. > Cognex (CGNX) agreed to acquire RealSense, a 3D robotic perception and depth‑sensing camera platform, for approximately $500 million in cash. The deal expands Cognex into the high‑growth robotic perception market, which is estimated at $600 million today and projected to…
2 more of the top 3 · 108 posts in this stretch
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Part of my work involves buying a fuckload of bulk commodities in the petroleum supply chain and I've seen stuff that barely moved in price for 3-4 years go up 50-100%+ within 6 months. I talk with my main sales reps almost daily and some of them have been in our industry for 40+ years. They've commented that the last year has been the worst…
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The literal only reason its so incredibly, nonsensically bullish randomly is because that is what is required to keep the market from experiencing negative gamma expansion. If puts get even a singular % down they instantly have to load up multiple days like this to extract any short term options premium and use it to prop up the broad market…
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Traders debate whether a divided Congress after midterms would force de-escalation
Some commenters speculate the rally partly anticipates a Democratic sweep of Congress that could force an end to the war and cap oil/refiner profits, while others argue Congress lacks the votes or power to compel Trump to make peace.
“My guess is it's in anticipation of a blue sweep across both houses of Congress. It'll be a divided Trump administration vs Democrat controlled Congress. They'll likely force a deescalation and end of the war.”
— richizy -
The AI buildout is driving markets higher. But there are numerous headwinds to this buildout the market is straight up ignoring. The rate of data centers coming online is slowing with delays and backlogs growing, all the inputs to building data centers are getting more expensive (chips, memory, energy, raw materials, labor, etc), hyperscalers are…
2 more of the top 3 · 51 posts in this stretch
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Because the macro environment is not bullish and there's nothing fundamentally driving today's rally. I disagree, macros are prett fine, I tend to look at ER, and guidance as a sign of things to come. So far ER for Q2 has been great, and guidance all around were beat, and raised. Fed last weds also says they see GDP increasing, and unemployment…
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The S&P literally removes companies that are not productive and replaces them with ones that are. The whole thing is built to grow and the US is a juggernaut of innovation and growth. I get things are not rosy every minute of the day and there will be downturns, but the epic crash that is doomered on here isn’t going to happen. Covid should’ve…
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Tanker stocks stay elevated on war-disrupted oil shipping
Tanker stocks such as ECO and FRO are described as cooling off after a large run, with commenters attributing continued elevated rates to closed chokepoints, aging fleets, and daily attacks on the tanker fleet amid the ongoing war.
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I'm going to leave the fact that you think 1st amendment expression (not legal coverage, mind you) ends at your employer doors. But to say he faced no consequences is nuts lmao he was 29 and in his physical prime and never received a single contract offer ever again. When he sued the NFL for collusion, arbitrators refused to dismiss as the NFL…
2 more of the top 3 · 13 posts in this stretch
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Employers can fire you or not hire you for any legal reason. There's plenty of things I can't say that would get me fired. In this case anyone can legally not hire him due to his protests on company time. He was bad for business and allegedly "bootlicking" owners is legally irrelevant. It was settled to make the distraction go away.
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Economy is booming, rate increase means fed is still independent. If fed didn't raise rates economy would get significally hurt. Also, historically not all fed increase has led to a recesssion. There has been times where fed increasing rates has led to a booming economy. The underlying economy remains stronger than ever.
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background
Commenters warn the market is ignoring AI-buildout headwinds — A widely engaged comment lists slowing data-center construction, rising input costs, hyperscaler cash burn, and rising public resistance to AI as risks it says the market is not pricing in.
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background
Nasdaq/QQQ jumps roughly 3% the day after the rate hike — The Nasdaq-heavy QQQ posted a roughly 3% gain in a single session immediately following the Fed's rate increase, a move several commenters called unexpected given the rate backdrop.
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background
30-year Treasury yield approaches 5.4% as diesel hits record high — Traders note the 30-year yield nearing a level last seen years earlier while diesel prices reach an all-time high, adding to uncertainty about whether the rally is sustainable.
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Alphabet's $98B one-time gain is shown to inflate S&P earnings-beat rate
A commenter notes that Alphabet's Q2 EPS of $9.11 versus an expected $2.88, driven by a $98 billion GAAP gain, is responsible for most of the S&P 500's unusually high earnings-surprise percentage, which would fall from 39.3% to 12.6% excluding Alphabet.
“The (GAAP) EPS actual for Alphabet for Q2 2026 included a gain of $98 billion. Excluding Alphabet, the surprise percentage for the S&P 500 for Q2 2026 would fall to 12.6% from 39.3%.”
— JabCrossE4E5Quark -
background
Fed raises rates while projecting stronger GDP — Commenters reference a Wednesday Federal Reserve decision to raise interest rates even as officials said they expect GDP to increase and unemployment to level off, framing it as evidence the Fed remains independent rather than reactive.
What people are saying 18 voices from 1 site · best of 172 · verbatim
- Will rising rates and input costs actually slow the AI data-center buildout enough to hurt hyperscaler earnings?
- Can Democrats realistically win enough Senate seats to check Trump on the war, given Fetterman and moderate Republicans?
- How much of the S&P's reported earnings strength is real versus an artifact of one-time gains like Alphabet's $98 billion GAAP boost?
- Yesterday
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Because it was the least expensive way to remodel using the least expensive subcontractors during the time every corporation could issue super cheap bonds. That's also why everything looks the same now it's because it's the least expensive way to do construction. They also want this so they can gradually phase out the seating area and go 100%…
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Sure, if by interesting you mean highly regarded. Wtf do people think is gonna happen to treasury yields when countries all over the world sell their treasuries to pay outlandish sums to secure energy for their country? No diesel means no tractors to harvest crops (bad for food prices), trucking slows to a crawl, mining slows or stops. The world…
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An obvious bond bubble that hedge funds defeat with their sophisticated method of "shoving their cash under the mattress". That's reasonable. Bonds almost never beat stocks in the long run, and when they do it's barely. It was headline news in 2011 when they had beaten stocks over a 30 year period, coming off a starting period where the fed funds…
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The market apparently thinks its March still and the crisis will be over tomorrow. Anytime there's even a hint of diplomatic activity energy falls off a cliff, bond yields drop, and tech skyrockets. No one wants to be caught offsides when this conflict ends of course. The problem is that the market doesn't understand how fucked things are already…
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Convertible bonds have been there since year 1602. Shipping voyages considered too risky had a problem raising loans from banks So we're comparing extremely high risk gambles that could completely sink at sea, in an environment of relatively primitive banking systems and bonds... To AI in straight up equity options within unbelievably liquid and…
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Better question or way to think is who is the business being evaluated. Depends on your goals with your investment, but usually the key to being successful is to buy a good a business at a good price. Like IOQN marketcap right now is 16B and they did like 250M in revenue this year. They are growing pretty fast, but they still aren’t making money…
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Lol, headline chump. That was intial openAI response. The followup was “could not have influenced the system in any way, including through training.” Not to mention OpenAI solved the euler component, what Buckmaster was actually working on, using a different approach. There is absolutely no dispute that these models are rapidly improving the pace…
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AMD giving away $100B in equity to OpenAI.... In exchange for OpenAI to buy... $100B of chips. They're literally just diluting their stock so they can donate chips for free and record it as revenue. But yea, this isn't a ponzi scheme. u/PlayfulPresentation7 sorry missed your response last night. Do we call it a Ponzi scheme when Honda Financial…
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Lmao, again showing your ignorance. Not only was it not in the training data, but other mathematicians have already concluded that their work was not sufficient at all to be considered the reason it would have solved it. Not to mention all the other open math it solved. And not to mention the costs of these feats is the fastest depreciating cost…
- Sep 22
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Complaining about FCF while witnessing the AI buildout is incredibly dumb. Its not like it mysteriously went down and the business is in trouble. A technological breakthrough occurred in 2022 that made the turing test child's play, and now we have matrix mults that are smarter than you and have solved at least 1 millennium problem while you were…
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Who said I missed out on anything? I'm maxing my 401k and have been overweight semis for years. I've benefitted from this market. Hilarious that you think I must be a bear with 100% cash on the sidelines just for pointing out how insanely stupid and short-sighted this market is. Don't worry though, surely the market will simply go up 20-30% every…
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Everyone I know not making 6 figures is so stressed all the time. My Sr Analyst is asking for a raise because he literally cant save money month to month and he lives in some shitty basement apartment. Jobs at my company are now posting salaries for Sr Analysts LESS THAN WHAT I WAS PAID IN 2018. Not adjusted for inflation, nominal. Every Sr…
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Hah. Since you actually said something worth responding to, I will gift you one last reply. I'm underperforming on my 20% cash sure. But my international which makes up almost all of my remaining is crushing SPY. No one knows for sure when either: US stocks will crater. Or inflation will destroy your gains anyway. And I'll continue laughing at…
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Most of the "growth" of the Mag7 "profits" are coming from the value of their investments in OpenAI and Anthropic. Every few weeks the private estimates of the value of both companies go up and therefore every company that "invested" in them gets to book their share in those companies as profit. It's all one big circular financing circle jerk…
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They really aren't. Paper diesel prices also react to headlines just like oil does, even when it makes zero sense. When we had a similar headline-driven tanking of crude back in July (coincidentally Trump threatened to escalate and then didn't back then too) diesel fell from $4.24 on July 29 down to $3.77 on August 4th. Didn't stop the price from…
- Sep 21
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Tankers in general and ECO and FRO in particular are currently on sale. Might drop a bit further from here, but this is a cooling off period after a huge run (ECO is still up ~28% in the last month). The factors supporting tanker rates remain true, with no real end in sight (inefficiencies from so many closed chokepoints, countries desperate for…
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I don’t know if it makes me a bear, but I’m selling some positions today in the one portfolio I actively manage. Right now my actively managed portfolio which is entirely ETFs is beating my Bogleheads and my Target Date fund portfolios by 2-3% points in my YTD, so I must be doing something right. I always cash out 5% of my portfolio on days when…
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When will people learn that the market goes up. It will always go up, literally forever. For some reason people find this hard to believe, but it's the entire point of having a stock market. The market will basically go up continuously for your entire life, and then will continue long after you die. Stop trying to time the market, that's for…