The thesis isn't settled. It's paused. Monday's relief rally, Tuesday's chip streak, and this morning's PMI shock all happened in the same week, and they don't point in the same direction.
Three Days, Three Different Stories
Monday was the cleaner session: stocks closed sharply higher, yields pulled back, and oil dropped to an 11-day low. The 10-year slipped below 5.00% for the first time in days, and WTI crude settled near $95.78 after topping $100 the prior week. The market took a breath, semiconductors led, and for one afternoon the AI trade looked like it had simply been on sale.
Tuesday extended the move: the tech-heavy gauge rose 0.8%, and a closely watched semiconductor index climbed for a sixth straight day. Brent settled near $99 as President Trump signaled that US officials had a "very good" meeting with Iranian envoys in New York. The Hormuz risk premium didn't disappear, but it deflated enough to take pressure off duration.
Wednesday ended the streak. The flash S&P Global Composite PMI printed 58.4 in September, the highest since July 2021, up from 56.0 in August. Alongside that, price pressures intensified: average input costs surged to the highest level since October 2022, blamed primarily on fuel and transport. Equities fell, chipmakers sank, Brent topped $101, and Fed Governor Barr said further tightening is likely needed to bring inflation to target. Treasury 10-year yields jumped to the highest since 2007.
Here's the non-consensus read on that PMI number: a 58.4 composite that simultaneously signals the fastest growth in five years and the worst cost pressures since 2022 is not a green light. The Atlanta Fed's GDP tracking estimate is running at a 5.1% annualized rate. That's the kind of figure that gives Warsh's committee full permission to hike again, and the dot plot from last week already told you that's exactly what most participants are considering. Strong growth with rising input costs is the Fed's problem, not a reason to ease off the rate view.
The 10-year is hovering near 4.93% as oil's losing streak offered some relief to duration sentiment, but the PMI print reopened that wound in the same session. The 5.00% line keeps getting tested from both sides.
The Summit Is the Event. The Data Is the Setup.
President Xi arrives in Washington on Thursday for a face-to-face meeting with Trump, and this is the week's real catalyst. Trade, artificial intelligence, Taiwan, critical minerals, and the US war with Iran are all expected to dominate the discussions. For the AI infrastructure pillar, the narrow question is chip licensing language.
A parallel one-year delay on US export controls on advanced semiconductor chips expires November 10, and Beijing is pressing to extend or soften it. While the US Trade Representative said chip controls were not on the formal agenda in preliminary talks, China is expected to push to have them relaxed. A chip-licensing clause ambiguous enough to require legal interpretation could generate a week of sector volatility rather than a clean one-session move. For NVDA, this matters directly: the company's current guidance already excludes China datacenter revenue on the assumption that export restrictions hold. Any language that muddies that assumption, in either direction, reprices the stock before the next earnings call.
China's rare-earth export control moratorium also expires November 10, giving Beijing significant leverage as both sides negotiate a broader trade truce extension. CSIS noted after preliminary contacts that little progress was made on the most consequential dimensions of the competition: AI, cyber, export controls, and digital sovereignty. Manage expectations accordingly.
On the data side: Thursday brings weekly jobless claims, continuing claims, the Q2 current account balance, and August new home sales. The claims number will get a look given how much the hike narrative depends on a still-firm labor market. Costco reports Q4 2026 earnings after the close Thursday, with analysts expecting approximately $6.55 per share on roughly $94.9 billion in revenue. COST is a useful macro thermometer on consumer spending under a rate-hike regime, less so a fund thesis name, but the margin guidance will matter for the broader consumer tape.
Friday brings August durable goods orders (preliminary) and the final University of Michigan Consumer Sentiment reading for September. Durable goods will be the last major read on business investment before Micron's earnings on September 30, which is the next hard date for the memory and HBM thesis. The preliminary Michigan Sentiment reading already fell from 51.7 in August to 47.8, with one-year inflation expectations rising to 4.6%. A further deterioration in the final print would confirm that consumers are starting to feel the rate regime in a way the equity market hasn't fully priced.
The week opened on oil relief and a chip recovery that looked earned. It's ending with a PMI that hands the Fed another argument and a summit that could reprice the entire AI export story in either direction by Thursday evening. MU's September 30 report is the next clean thesis test, but the setup for that report is being written right now in Washington.
Nova One Capital and the Nova X Convergence Fund hold positions in securities discussed in this letter. This document is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any security. All views reflect the judgment of the author as of September 23, 2026, and are subject to change without notice. Past performance is not indicative of future results.