AI Trading Focus Shifts to Return Validation Amid High Volatility

Market dilemma shifts from recession fears to inflation offsetting growth. Fed holds rates at 3.50-3.75%. AI trading pivots from revenue to capital returns, with sector rotation expected.

Woofun AI reports that HTX Research analyst Chloe identifies a shift in market focus from recession concerns to whether high growth can offset inflation and interest rates. The Federal Reserve maintained the funds rate at 3.50%–3.75% on July 26, with markets pricing a 57% chance of a September hike. Communication between Trump and Warsh may reduce policy disruption but raises independence doubts, creating a 'bear steep' yield curve with 10-year yields near 4.64%. AI trading is moving from revenue growth to evaluating returns and margins. Baseline scenarios suggest high-level volatility and rotation in August, with stable cash flow sectors outperforming. If oil stays near $80 and employment drops, a rate pause could rally tech; however, oil above $90 and sticky inflation could trigger a Fed hike and a 10% Nasdaq adjustment.