What is the biggest driver of market action? The AI boom or the Fed?

Group 1: Federal Reserve and Interest Rate Policy - The Federal Reserve is expected to ease monetary policy, with the main debate focusing on the timing and pace of this easing [1][2][4] - Concerns about inflation persist, as it remains above the 2% target, but there is a consensus that the neutral rate is below current levels [2][12] - The economic backdrop is characterized by a potential need for rate cuts to support valuations, especially given the current high rates relative to economic growth [11][14] Group 2: AI Trade and Market Sentiment - There has been a significant reset in market sentiment over the past month, influenced by large deals and the AI infrastructure buildout projected to reach $3 to $4 trillion by 2030 [5][6] - Companies like Nvidia and Applied Materials are seen as attractive investment opportunities due to their roles in the AI infrastructure [7][9] - The economic profit within the technology sector is shifting from software to infrastructure, indicating a broader investment opportunity beyond the major tech companies [8][9] Group 3: Employment and Economic Growth - The labor market is showing signs of slowdown, with many individuals living paycheck to paycheck, which raises concerns about sustaining economic growth [12][13] - Employment growth is primarily observed in low-wage service sectors, which does not provide a strong foundation for broader economic expansion [14] - The top 10% of the population holds a significant portion of stock market wealth, highlighting income inequality and its potential impact on consumer spending [12]