Markets soared Friday after Federal Reserve chair Jerome Powell hinted that interest rate cuts could come as soon as September.

The Dow closed at a record high , climbing some 2% in its best day since the spring. The S&P 500 rose 1.5%, coming within just a few points of its own all-time high. The Nasdaq gained nearly 2%, with megacap tech stocks leading the charge. Tesla jumped 6%, Alphabet and Amazon more than 3%, Meta 2%, and Nvidia 1.7%.

Now investors face a megacap of a question, one that is likely to define the rest of 2025: Will easier money become fuel for another leg of Big Tech’s historic surge? Or is it the signal that tech has peaked, at least for now?

Powell’s speech at Jackson Hole was characteristically muted, but markets still appeared to hear what they needed to hear: “The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said, referring to President Donald Trump’s sweeping changes to tax, trade, and immigration policy.

Futures markets quickly priced in an 83% chance of a quarter-point cut at the Fed’s September meeting, up from about 75% earlier in the week. As of Monday morning, the prediction market Kalshi pointed to 85% of participants seeing a September rate cut of at least 25 bps as likely.

The shift in expectations matters because monetary policy tends to be the single biggest macro force driving stock valuations — and this when the “Magnificent Seven” stocks have packed on trillions in additional value this year, fueled by investor belief in AI breakthroughs, plus the hope that interest rates have peaked. When rates are cut, borrowing becomes cheaper, which can fuel increased risk appetite and contribute to rising stock prices.

But after the sort of run we’ve seen this year, the same Fed pivot could just as easily serve as a turning point, especially as many investors wonder how tech valuations could possibly stretch further.

While traditional metrics like price-to-earnings ratios are thought to be less than totally applicable to high-growth tech businesses — many of which turn on groundbreaking technology and the discovery of new products and markets — the multiples on some market darlings still look eye-watering. Nvidia, for instance, is sitting at a price-earnings ratio near 60 , more than twice the price-earnings ratio of the S&P 500 itself .

Monday’s futures suggest some caution. As of early morning, S&P 500 and Nasdaq futures were off around 0.3%, while the VIX jumped nearly 7%.

The next big catalyst comes Wednesday, when Nvidia reports earnings. With Powell’s signal on lock, traders will be watching whether the AI bellwether can justify the sky-high expectations that have come to define it—and 2025’s rally.