Fed Jay Powell bobbed and weaved yesterday, feigning ignorance of any emerging shocks building in the system. He threw reporters a bone, admitting they may have waited too long to cut rates last year, although many thought there wasn’t any sense of urgency. Be that as it may, aside from a few changes in the statement, it was a ho-hum question-and-answer period, where reporters spent a lot of time contradicting themselves, making it challenging to apply any heat to the Fed chair.

Trump to the Rescue

The market was on its way to a ninth consecutive down ‘Fed Day’ session when a story broke that President Trump is preparing to rescind Biden's trade restriction on Artificial Intelligence (AI) chips.

Chip stocks caught a bid, and the chart setup became bullish.

It's Not How The Market Opens

The late spurt lifted the S&P 500 (SPX) into the plus column on the session.

VanEck Semiconductor ETFs (SMH) soared, but hardware remained in the red. Materials (XLB) pulled up the rear.

I prefer a rally that doesn’t need the Fed’s punch bowl.

When “Mag Seven” Don’t Have to Lead

Yesterday, Alphabet Inc. (GOOGL) was the worst-performer in the S&P 500. The key to the next leg of a sustained rally is for enough names outside “Mag Seven” and Technology (XLK) darlings to step up.

Broadening The Rally

There has been a swift increase in stocks changing hands above their respective 50-day moving averages. This is good news, but it needs to continue toward 80% to propel a breakaway move that forces entrenched bears to buy.

Looking for First Trade Deal

Yesterday, we posted a new “Question of the Week,” asking which country would be the first to sign a new trade deal.

We received lots of intriguing replies.

Stay tuned.

Today’s Session

Futures are higher this morning after the US trade deal with the UK boosts optimism.

• UK OFFICIALS SEE US DEAL INITIALLY FOCUSED ON CARS, STEEL: FT

On the economic front, jobless claims fell last week to 228,000 from 241,000, below expectations of 230,000.

Comments

Powell admits current rates are "somewhat" restrictive. If he sees increased risks one would think the Fed would cut to neutral. I just wonder what every other "central bank" in the world sees, that our Fed either doesn't see or refuses to acknowledge. Pat on 5/8/2025 1:42:26 PM

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