{"id":66470,"date":"2026-08-13T10:38:17","date_gmt":"2026-08-13T14:38:17","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/tech-and-geopolitics-drive-markets-as-fed-rate-hike-bets-fade\/66470\/"},"modified":"2026-08-13T10:38:17","modified_gmt":"2026-08-13T14:38:17","slug":"tech-and-geopolitics-drive-markets-as-fed-rate-hike-bets-fade","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/tech-and-geopolitics-drive-markets-as-fed-rate-hike-bets-fade\/66470\/","title":{"rendered":"Tech and Geopolitics Drive Markets as Fed Rate Hike Bets Fade"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Databricks<\/strong> completed a massive <strong>$5 billion funding round<\/strong>, skyrocketing its valuation to <strong>$190 billion<\/strong> amid an 80% surge in annual revenue.<\/li>\n<li><strong>U.S. equity markets<\/strong> extended gains on Thursday, with the <strong>Nasdaq<\/strong> rising <strong>1.00%<\/strong> as cooling wholesale inflation data eased pressure on the Federal Reserve.<\/li>\n<li><strong>Traders<\/strong> have officially backed away from pricing in a <strong>Federal Reserve<\/strong> rate hike for the remainder of 2026, shifting expectations toward a prolonged pause.<\/li>\n<li><strong>Geopolitical tensions<\/strong> escalated as an advisor to Iran\u2019s Supreme Leader threatened an <strong>&quot;offensive strategy&quot;<\/strong> in the Persian Gulf, targeting a new regional order independent of U.S. military guarantees.<\/li>\n<li>A violent <strong>explosion<\/strong> rocked a <strong>KNDS<\/strong> ammunition facility in <strong>Colleferro, Italy<\/strong>, raising immediate concerns over European defense production stability.<\/li>\n<\/ul>\n<h2>Tech Valuations Surge Amid AI Infrastructure Boom<\/h2>\n<p>Data and AI powerhouse <strong>Databricks<\/strong> has finalized a <strong>$5 billion strategic funding round<\/strong>, valuing the company at a staggering <strong>$190 billion<\/strong>. The round was led by <strong>Coatue Management<\/strong>, with participation from <strong>Blackstone (<a href=\"\/stock\/BX\">BX<\/a>)<\/strong>, <strong>MGX<\/strong>, and <strong>T. Rowe Price (<a href=\"\/stock\/TROW\">TROW<\/a>)<\/strong>. CEO <strong>Ali Ghodsi<\/strong> noted that the company has surpassed a <strong>$7 billion revenue run-rate<\/strong>, growing at more than 80% year-over-year as enterprises race to build autonomous AI agents.<\/p>\n<p>The capital injection is expected to fund the development of <strong>Unity AI Gateway<\/strong> and <strong>Lakebase<\/strong> as Databricks intensifies its rivalry with Snowflake (<a href=\"\/stock\/SNOW\">SNOW<\/a>). Despite the massive valuation, Ghodsi indicated that an initial public offering remains unlikely until other major AI players like <strong>OpenAI<\/strong> or <strong>Anthropic<\/strong> test the public markets.<\/p>\n<h2>Markets Rally as Inflation Cools and Fed Pivot Hopes Rise<\/h2>\n<p>U.S. stocks surged on Thursday morning, with the <strong>Nasdaq Composite (<a href=\"\/stock\/NDAQ\">NDAQ<\/a>)<\/strong> gaining <strong>1.00%<\/strong> and the <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a><\/strong> climbing <strong>0.8%<\/strong> toward new record highs. Investor sentiment was bolstered by the <strong>July Producer Price Index (PPI)<\/strong>, which showed wholesale inflation rising at a slower-than-expected annual rate of <strong>4.7%<\/strong>, down from 5.5% in June.<\/p>\n<p>This cooling trend has led money markets to <strong>de-price the likelihood of further interest rate hikes<\/strong> this year. <em>Swap markets now suggest that the Federal Reserve, led by Chair Kevin Warsh, is increasingly likely to maintain current rates through December.<\/em> While some Fed officials, including Richmond Fed President <strong>Tom Barkin<\/strong>, called the need for further hikes an &quot;open question,&quot; traders are now betting on a definitive end to the tightening cycle.<\/p>\n<h2>Geopolitical Volatility Hits Defense and Energy Sectors<\/h2>\n<p>In a sharp escalation of rhetoric, <strong>Mohammad Mokhber<\/strong>, an advisor to Iran\u2019s Supreme Leader, warned that Tehran will shift to an <strong>&quot;offensive strategy&quot;<\/strong> if its regional conditions are not met. Mokhber proposed the <strong>Hormuz economic-security mechanism<\/strong>, a framework intended to secure the vital waterway without U.S. military involvement. <em>The announcement has kept <a href=\"https:\/\/stockmarketwatch.com\/energy\/crude-oil\" data-internallinksmanager029f6b8e52c=\"12\" title=\"Crude oil\">oil prices<\/a> volatile, with Brent crude hovering near $90 per barrel as the risk of a renewed blockade in the Strait of Hormuz persists.<\/em><\/p>\n<p>Simultaneously, a major <strong>explosion<\/strong> occurred at the <strong>KNDS Ammo Italy<\/strong> facility (formerly Simmel Difesa) in <strong>Colleferro<\/strong>. The blast, which was felt by residents several kilometers away, hit a site specialized in ammunition production. While the cause is still under investigation, the incident adds pressure to a European defense sector already struggling to meet heightened demand for military hardware.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Databricks completed a massive $5 billion funding round, skyrocketing its valuation to $190 billion amid an 80% surge 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