Oil price trends,NVIDIAFinancial reports and the Federal Reserve’s annual symposium constitute the three major market variables this week—but inGoldman SachsIt seems that the weights are not equal.

Rich Privorotsky, head of Goldman Sachs’s One-Delta hedge fund business, noted in his latest client report that,For the broader stock market, the importance of oil prices this week is likely to outweigh…Jackson HoleAnnual meeting.He cited the U.S. Treasury’s latest moves on Iran sanctions as a key market focus, warning that if the sanctions directly target Asian refiners, they could spark new trade tensions. Meanwhile, NVIDIA released its earnings report on Wednesday, which Privorotsky described as a “mixed bag.”

Market sentiment clearly shifted last week.NasdaqConsistently underperforming the broader market, tech stocks are facing large-scale sell-offs, and AI-related narratives are under pressure for valuation reassessment. Privorotsky believes that the price decline itself is reinforcing the bearish narrative—“Price-driven narratives: once prices have fallen sufficiently, the old arguments about price deflation, market saturation, and competition suddenly start to sound quite convincing.”

Oil prices: the most direct tool for stabilizing the bond market.

Privorotsky ranks oil prices as the top risk factor for this week. His chain of logic is clear: last weekStagflation basket assetsThe sharp increase stems from the combined effects of rising energy prices and weakening economic growth.

“If the United States truly wants to stabilize the bond market, lowering energy prices may be the most practical approach,”He wrote. He estimates that for every $10 decline in oil prices, inflation expectations will improve, consumer confidence will strengthen, long-term yields will be suppressed, and the stock market will receive support.

In his view, aside from the sharp vertical increase in AI capital expenditures, the macro fundamentals are not optimistic—the labor market is weakening, consumer performance is mediocre, and the tailwinds from fiscal policy and inventories are fading. Nevertheless, annual AI infrastructure investments exceeding US$1 trillion still represent a nominalGDPProvide support.

NVIDIA: Hidden Concerns Beyond Strong Demand

Nvidia’s earnings report on Wednesday is the most closely watched event in the tech sector this week.Privorotsky expects demand data to be “absurdly strong,” with revenue on a massive scale.

However, he has reservations about two issues. First, NVIDIA is increasingly being positioned by the market as the "central bank of AI," and the scale of financing commitments surrounding its ecosystem has drawn attention. The second issue is memory costs—if costs continue to rise, will NVIDIA choose to absorb them internally, pass the burden downstream, or reduce its reliance on memory through engineering solutions? This is critical for trading in the memory sector."

The broader AI/semiconductor sector has already shown signs of pressure. Last week, a free state-of-the-art model called Ox Alpha, whose developer remains unknown, drew significant market attention.OpenAISubsequently, the API pricing for GPT-5.6 Sol was reduced.Silicon Data LLM Token Expenditure Index（SDLLMTK IndexIt has cumulatively fallen by nearly 40% since the end of June.

Privorotsky noted that, at present, no companies have indicated plans to cut hardware spending, but stock valuations are already being proactively compressed.BroadcomLast week, a $60 billion debt financing was completed, and the massive scale of bond issuance required for AI infrastructure has begun to raise market concerns—“If you assign any probability to the scenario where ‘the company ultimately cannot finance all its plans,’ the outcome will either be further equity dilution or cuts in capital expenditures, neither of which supports higher valuation multiples.”"

Jackson Hole: Event risk is limited.

The main highlight of the Jackson Hole symposium will unfold on Friday with Mr. Wash’s keynote address. Privorotsky assigned a low risk assessment to the events at this conference.

He expects the July PCE data to be released on Wednesday to largely meet expectations, with core PCE rising by about 20 basis points month-over-month, in line with market consensus.

Regarding Wash’s speech, he believes that, given the Federal Reserve has clearly shifted toward downplaying forward guidance,Unless Wash significantly deviates from its usual stance, it will be difficult to trigger a major market shock.“Most people expect a neutral tone, with a slight tail risk toward a hawkish stance—though the exact form remains unclear, possibly reflected in statements regarding the balance sheet.”

Fiscal intervention: more symbolic than substantive.

Last week, the primary focus of the market remained interest rates. Finance Minister Besant’s market intervention has begun to lose its effect, but yields remain below the levels observed prior to his intervention.

Privorotsky believes that the symbolic significance of this intervention will have a more profound impact on both the U.S. dollar and gold. This has reinforced a path of interventionism rather than genuinely addressing the fundamental imbalance of fiscal overspending. He attributes both the rise in long-end inflation swaps and breakeven rates, as well as the stronger-than-expected performance of precious metals, to the market’s pricing of this outlook.

Within the aforementioned framework, Privorotsky maintains his core portfolio stance: overweight financial and industrial stocks, hold nominal assets, and assume that the likelihood of a substantial deficit reduction remains limited. “The S&P’s gold allocation remains reasonable,” he wrote. Regarding bonds, he leans toward shorting them but says he would prefer to wait for a better technical entry point at the end of the month.

Regarding the semiconductor sector, his view is that valuations will ultimately provide support, but not until earnings growth catches up with current valuation multiples—a process that could accelerate as investors shift their focus to 2027 earnings forecasts.He finds it hard to see the momentum for this sector to keep hitting new highs.