Macroeconomics and Liquidity — The Impact of Federal Reserve Policies on Semiconductor Giants

Interest rates remain unchanged, liquidity is ample, and NVIDIA is considered a "hedge-style growth stock"

In May 2026, the Federal Reserve announced at its early May meeting to keep interest rates steady (5.25–5.50%), but signaled that there might be a rate cut once this year. Market expectations for rate cuts have cooled, but a 25 basis point cut is still anticipated in September or December.

For super growth stocks like NVIDIA, a high-interest-rate environment usually suppresses valuations because the discount rate of future cash flows is higher. But why can NVIDIA still hit new highs? The answer is: profit growth is so rapid that the impact of interest rates is completely offset. Even if the denominator (discount rate) increases, the numerator (cash flow) grows faster, and the stock price still rises.

Additionally, AI is viewed as a "macro-insensitive" theme. Regardless of whether the economy is good or bad, companies will cut other expenses to ensure AI investments are maintained, so as not to fall behind competitors. During economic downturns, AI spending may even increase against the trend — because the demand for automation and cost reduction is more urgent. This gives NVIDIA a certain "hedging attribute," despite being a growth stock.

In terms of capital flow, over the past week, northbound funds (flowing into U.S. stocks) saw a net inflow of $3.8 billion, with semiconductor-themed ETFs accounting for $1.2 billion. As the largest-weighted stock, NVIDIA benefits significantly.

On the macro level, there are no major risk events remaining in May (the next CPI release on May 15 is in line with expectations). Therefore, I judge that NVIDIA's stock price will steadily rise in May following its own trend, with a forecast range of $230–$242.