S&P 500 7000, Models S&X are discontinued, Powell holds the Line, and Nvidia’s China Chip Sales

Wall Street just smashed through a historic ceiling, with the S&P 500 crossing 7,000 as investors shrugged off geopolitical jitters and doubled down on earnings, momentum, and the AI trade. The rally comes even as the Federal Reserve hits pause, holding rates steady in a split decision that signals caution, patience, and plenty of internal debate about where inflation and growth go next. Meanwhile, Elon Musk is drawing a brutal line between yesterday and tomorrow. Tesla is retiring its flagship Model S and X to make room for humanoid robots, betting that autonomy and AI not luxury cars will define its future. And in a quiet but consequential shift, China has approved the first imports of Nvidia’s H200 AI chips, reopening a critical pipeline for advanced computing power just as global demand explodes. Markets are flying, icons are being retired, policy is tightening its grip, and the AI race is going global again. All that and the signals behind it in today’s Read It And Eat!

MAJOR HEADLINES

• S&P 500 tops 7,000 for first time

  
  

The S&P 500 crossed the 7,000 milestone for the first time, marking a powerful rebound after last week’s market sell-off triggered by geopolitical tensions surrounding Greenland. Investors quickly shifted focus back to fundamentals, particularly corporate earnings, which have continued to outperform expectations. The index rose 0.3% in early New York trading, underscoring how rapidly risk appetite has returned despite lingering global uncertainty.

This latest rally extends an extraordinary run for U.S. equities. The S&P 500 has now delivered double-digit annual returns for three consecutive years, defying predictions that higher interest rates, inflation concerns, or geopolitical shocks would significantly derail growth. Much of the momentum has been driven by technology and AI-linked stocks, which continue to dominate earnings growth and investor enthusiasm.

Still, the milestone carries both optimism and caution. While breaking 7,000 reinforces confidence in U.S. corporate strength, it also raises questions about valuations, market concentration, and sustainability. With a small group of mega-cap firms accounting for a large share of gains, markets remain vulnerable to earnings disappointments or policy surprises — even as the broader trend remains decisively upward. Financial Times

• Elon Musk says Tesla is discontinuing Model S and Model X and doubling down on Optimus robots

Elon Musk announced that Tesla will discontinue its Model S and Model X vehicles, signaling a decisive shift away from legacy products that once defined the company’s brand. Speaking during Tesla’s fourth-quarter earnings call, Musk framed the move as an “honorable discharge,” arguing that Tesla’s future lies not in premium cars but in autonomy and robotics. Production lines at Tesla’s Fremont factory will be converted into facilities for Optimus humanoid robots.

The decision reflects Musk’s long-held belief that Tesla’s greatest value lies beyond electric vehicles. While the Model S and X played a critical role in Tesla’s early growth and reputation, their sales volumes have lagged behind mass-market models. By reallocating resources toward Optimus, Musk is betting that humanoid robots capable of performing industrial and service tasks will become a trillion-dollar market.

However, the pivot comes with substantial execution risk. Optimus remains in early development, and scaling production to Musk’s stated goal of one million robots per year presents immense technical, regulatory, and economic challenges. For investors, the move sharpens Tesla’s identity as a long-term autonomy and AI company but also increases reliance on unproven technologies to justify its valuation. Yahoo Finance

• After Three Interest Rate cuts, the Fed Holds Steady this time

The Federal Reserve held interest rates steady at its first policy meeting of 2026, signaling a more cautious and flexible approach after cutting rates in the final three meetings of 2025. Officials emphasized that future decisions would be made on a “meeting-by-meeting” basis, reflecting growing uncertainty around inflation, growth, and labor market dynamics. The decision was closely watched as a test of whether the Fed would continue easing or pause to reassess conditions.

Internal divisions within the Federal Open Market Committee were once again evident. In December, officials voted against rate cuts in both directions, highlighting disagreement over whether inflation risks remain elevated or economic growth is slowing enough to justify further easing. These splits suggest that monetary policy in 2026 may be less predictable and more reactive to incoming data than in previous cycles.

For markets, the Fed’s stance offered reassurance rather than alarm. Holding rates steady reinforced the view that policymakers are prioritizing stability and credibility over aggressive intervention. While investors continue to price in eventual cuts later in the year, the Fed’s message was clear: policy will remain data-driven, and patience not urgency will define the next phase of monetary decision-making. Yahoo Finance

• China Approves First Nvidia H200 AI Chip Imports

China has approved its first imports of Nvidia’s advanced H200 AI chips, marking a notable easing of restrictions amid soaring domestic demand for high-performance computing. According to sources, the clearance covered several hundred thousand chips and was granted during Nvidia CEO Jensen Huang’s visit to China. Initial allocations reportedly went to major Chinese internet companies, with more firms awaiting additional shipments.

The move is significant given ongoing U.S.-China tensions over technology access. While export controls remain in place for Nvidia’s most advanced chips, the approval suggests a pragmatic recalibration aimed at preventing severe bottlenecks in China’s AI development. For Nvidia, the decision offers a crucial foothold in one of the world’s largest AI markets at a time when global competition for compute power is intensifying.

More broadly, the approval highlights how AI infrastructure is increasingly shaping geopolitics. As governments balance national security concerns against economic competitiveness, selective access to advanced chips is becoming a strategic tool rather than a binary restriction. For markets, the decision reinforces Nvidia’s central role in the global AI ecosystem and signals that technological decoupling may be more nuanced than previously assumed. Yahoo Finance

Minor Headlines

• Amazon to axe another 16,000 corporate jobs Financial Times

• China went from lender to debt collector for Africa nations Business Insider 

• Markets are the most risk-on since 2021  Bloomberg

• JPMorgan told M&A bankers to do more to close the gap with Goldman Bloomberg

• HSBC hit a $300B market cap for the first time Baha BTN

• Canada is set for an IPO revival on renewed economic confidence Reuters

• Five percent of companies attract roughly 50 percent of total VC funding. CTech 

• Carvana stock plunged 14% on a short seller report CNBC