Nvidia China Ban, Fed Rate Cut Awaited, Kroger Upgraded

The Financial Times reported that China’s internet regulator has directed some of the country’s largest technology companies to cease purchasing artificial intelligence chips from Nvidia (Nasdaq: NVDA). The immediate market reaction was negative, with Nvidia stock declining nearly 3% on the news as investors grappled with uncertainty regarding the ban’s scope, duration, and whether it represents a negotiating tactic in ongoing tariff discussions with the Trump administration.

The broader market impact was also felt, with the Vanguard S&P 500 ETF (NYSEMKT: VOO) turning negative, down more than 0.1% following the announcement. The development highlights the ongoing geopolitical tensions affecting technology supply chains and semiconductor trade between the world’s two largest economies, creating additional volatility for chip stocks and related technology sectors.

All eyes are on the Federal Reserve today as the Federal Open Market Committee prepares to announce its interest rate decision at 2 p.m. ET. Market participants widely anticipate the first rate cut of the year, with most investors expecting a conservative 0.25% reduction, though possibilities range from a more aggressive 0.5% cut to no change at all—a scenario that would likely disappoint markets.

Supporting the case for monetary easing, recent housing market data revealed concerning trends. CNBC reported that annualized applications for new building permits dropped 3.7% in August, projecting only 1.31 million new houses to be built this year. Housing starts showed similar weakness, trending toward 1.307 million for the year—an 8.5% decline from July figures, indicating broader economic softness that could justify Fed intervention.

The Vanguard S&P 500 ETF (VOO) traded essentially flat throughout the morning session, reflecting investor caution ahead of the Fed’s announcement. This neutral positioning suggests markets have largely priced in a quarter-point cut, with potential for volatility depending on the actual decision and accompanying commentary from Chair Jerome Powell.

In individual stock movements, Kroger (NYSE: KR) received a significant boost after Roth/MKM analyst Bill Kirk upgraded the stock to buy with a $75 price target. Kirk noted that despite beating earnings in its last report, Kroger’s valuation—approximately 7.6x EV/NTM EBITDA compared to 6.7x one year ago—has lagged behind peers. The analyst predicted that better volumes, inflation benefits, and cost savings should drive continued positive surprises, making the stock attractive at current levels. Kroger shares responded positively, opening up more than 1%.

Conversely, General Mills (NYSE: GIS) faced investor skepticism despite beating earnings expectations. The cereal giant and S&P 500 component reported fiscal Q1 2026 earnings of $0.86 per share, exceeding estimates by $0.05, with revenue meeting expectations at $4.5 billion. However, management reaffirmed guidance for flat sales growth between -1% and +1% for the year while warning that adjusted earnings could decline by 10-15%. This cautious outlook sent shares down 3% in premarket trading, highlighting investor sensitivity to forward guidance even when quarterly results exceed expectations.