🔴 AUGUST 28, 2026 (Fri) - NVIDIA FILLS YESTERDAY'S GAP. FIVE-YEAR YIELD BREAKS OUT. AI BEAR MARKET DEEPENS.
"BEAR MARKETS, IN SPITE OF WHAT PEOPLE HAVE SAID. BEAR MARKETS."
🎯 ACTIONABLE SUMMARY
Leading: Big cap tech (AMZN, AAPL, MSFT, GOOG) acting as parking lot. Software in better shape than semis. Avoid: Semis, AI infrastructure, space stocks, CoreWeave, gold/commodities (strong dollar hit them today) Watch Closely: Five-year yield broke out of a one-year range today at 4.481. Ten-year at 4.720. Gary watching yields "big time closely." Countries selling US bonds. Circular Financing Warning: NVIDIA announced $100 billion credit to an entity to buy their own chips. Gary: "What the hell is that?" CoreWeave has $35 billion in debt heading to $60 billion against a $45 billion market cap. Gary's Public Call: Was on Varney Show yesterday. Said flat out: not bullish on semis and AI. Recommended software.
📊 TODAY'S MARKET ACTION
- NASDAQ: Down 138
- NASDAQ 100: Down 208
- SOX: Down 412
- Advance/Decline: 1,533 declines on NASDAQ. 1,629 on NYSE. More new yearly lows than highs on NASDAQ.
Big cap tech held the indices up. Gary: "If all these other areas of technology are being sold, are the technology people parking their money in the big guys? I don't know, but it's certainly kind of sort of today."
Up today: Amazon up $10 (analyst upgrade), Apple up $5, Microsoft up $8 (was up $13 at one time), Google up $6.
📉 SEMI AND AI SECTOR: "THEY'RE MURDERING THESE STOCKS"
NVIDIA had a big move yesterday. Today: down $10.50, already filling yesterday's gap.
Gary: "I am very surprised today. I would have thought it would be up big."
Today's drops:
- LITE (Lumentum): Down $61
- Marvell (MRVL): Down $25 on earnings. CEO of NVIDIA touted it as a trillion-dollar stock when it was at $250, ran to $325. Now at $216.
- SITM (SiTime): Down $42
- MPWR (Monolithic Power): Down $54 (transcript shows "NPWR" which may be a transcription error)
- FIX (Comfort Systems): Down $96. Gary: "You know how we talk about FIX, the construction of these? They're murdering it."
- IESC (IES Holdings): Down $24 / down 7%
- ARM Holdings: Down $16
- Analog Devices: Down $12
- ASML: Down $38
- Applied Materials (AMAT): Down $21
- Lam Research (LRCX): Down $16
- KLA (KLAC): Down $8
- Teradyne (TER): Down $16
- Tower Semi: Down $11
- Seagate (STX): Down $21
- ONTO (Onto Innovation): Down $21
- NVMI (Nova Ltd): Down $21
- AEIS (Advanced Energy Industries): Down $14
Gary: "I have some stocks in artificial intelligence that have crashed. I have a lot of them that are down in the 20s if not more. Everything is under the 50-day moving average. A lot of things are in bear markets."
"The wide and loose action at the tops, after the rallies up, was the tell. We told you weeks and weeks and weeks ago."
⚠️ CIRCULAR FINANCING: DEEPENING CONCERN
NVIDIA announced $100 billion in credit to some entity to buy their own chips. Gary: "What the hell is that?"
CoreWeave:
- Total debt: $35 billion, heading to $60 billion
- Total market cap: $45 billion
- Gary: "Debt bigger than their market cap. What could go wrong? Everything."
Gary pointing listeners to Ed Zitron (@edzitron on X): "100 times smarter than me on the AI circular financing issue. He has really taken on NVIDIA." Zitron's finding: NVIDIA depends on 3 to 5 customers and the $674 billion in 2028 revenue predictions are contingent on hundreds of billions of dollars of debt.
Gary: "There's something not right. I am always worried about debt and deficits. And we've never seen $1.6 trillion off the books debt. $1.3 trillion on the books. And a lot more to come."
📈 SOFTWARE: BETTER BUT NEEDS TIME
Gary: "Software had a huge day yesterday. Huge day."
Today (the giveback):
- Rubrik (RBRK): Down $14 on earnings after big move yesterday
- Autodesk: Down $10
- SentinelOne (S): Down ~6%
- Palo Alto (PANW): Was down $20, finished down $11
- CrowdStrike (CRWD): Was down $15, finished down $9
- Cloudflare (NET): Down $8
Holding up:
- Workday (WDAY): Up $11 (was down hard yesterday on earnings, recovered today)
- Elastic (ESTC): Up nicely
Gary: "I think these software names are in shape right now. But yesterday was what we call an outlier move. Just too far off the earnings report. It's going to need time."
🪙 GOLD AND COMMODITIES: STRONG DOLLAR HIT
GLD: Down 3% today. Gold miners, silver, entire commodity space pulled back. Crypto pulled back.
Cause: Dollar had a very strong day tied to new Fed Chair Kevin Walsh taking over. Gary: "Typically it strengthens the dollar."
Gary still believes gold's medium-term setup is intact. Today was dollar-driven, not a fundamental break.
📊 YIELDS: "WATCHING BIG TIME CLOSELY"
Five-year yield: Broke out of a one-year range today at 4.481. Gary: "Big breakout." Ten-year yield: 4.720.
Gary: "The five-year yield is on the verge of busting out big time."
Countries selling US bonds. Gary: "They're selling Trump." Fed up with US foreign policy unpredictability. "I think we're the most disrespected now."
Gary's worry: If the bond market is selling while the new Fed head is signaling tighter policy, yields could spike and create serious problems for debt-laden AI companies and the broader market.
🏦 NEW FED CHAIR: KEVIN WALSH
Powell out, Walsh in. Walsh has instructed other Fed heads to stop talking. "They hardly speak now." Gary likes this. "I love that they're quiet."
Gary concern: Walsh was out today "talking about how he will and will and will." Gary: "He is like the rest that think they are the economy. 162 million of us go to work every day. We are the economy."
Gary's view: Walsh will follow the market and raise rates if yields go up. Watching closely.
💼 TRADER TAKEAWAYS
NVIDIA filled yesterday's gap the very next day. That is not the behavior of a stock trying to turn around. That is the behavior of a stock in a downtrend. Five-year yield breakout is the sleeper story of the day. A one-year range breakout at 4.481 with the ten-year at 4.720 is a serious macro warning. Software is better than semis but yesterday was an outlier. Needs time to consolidate before the next leg. CoreWeave: $35 billion in debt against a $45 billion market cap and heading to $60 billion in debt. Gary said everything that needs to be said. Space stocks: Getting killed alongside semis and AI. Gold/commodities: Today's pullback is dollar-driven. Monitor Walsh and the dollar next week. Gary's bottom line: "At the very least you should not be owning these stocks. They are in bearish phases of unknown price and time."
