Fed Hints, Market Rips: Can the Rally Hold?

Fed Opens the Door to Rate Cuts — Markets Cheer

Fed

Wall Street found its latest reason to rally: Federal Reserve officials signaling openness to interest rate cuts — possibly as early as June.

• Cleveland Fed President Beth Hammack said the central bank could act soon if it sees clearer data on economic direction.

• Governor Christopher Waller added he’d support cuts if Trump’s tariff strategy starts costing American jobs.

The Fed is still in “wait and assess” mode, but the tone has clearly softened.

Markets Rally for Third Straight Day — Tech Leads the Charge

The S&P 500 officially exited correction territory Thursday with a 2% gain, now up 10% from its April 8 lows.

• $S&P 500(.SPX)$ : +2.0% to 5,485

• $NASDAQ(.IXIC)$ : +2.7%

• Dow Jones: +1.2% (+487 pts)

The VIX hit 52 on April 8, a panic-level reading. Since then, sentiment has improved thanks to better earnings and more market-friendly political rhetoric.

Earnings Season: Better Than Feared

• $Alphabet(GOOG)$ beat expectations Thursday and jumped ~5% after-hours, helping sustain the market’s upward momentum.

• $Intel(INTC)$ l also topped on EPS, but guided lower for Q2, citing tariff-induced demand uncertainty.

Many companies are cutting or withdrawing full-year guidance — not because of poor performance, but because tariff volatility makes forecasting nearly impossible.

So far, though:

• 26% of the S&P 500 has reported

• 80% beat on earnings, 64% on revenues (Fundstrat)

Morning Briefing: Did the Market Bottom on April 8?

we revisited the question: Was April 8 the 2025 low for stocks?

Yes case:

• The VIX spiked to 52, marking capitulation.

$VIX

• A pivot toward more constructive trade messaging from the administration suggests a political recognition of market fragility.

No case:

• Macro uncertainty remains acute.

• Valuations do not yet reflect recession risk, which remains very real.

Data Check: Labor Resilient, Consumers Cautious

1. Initial Jobless Claims remain stable, showing no broad-based layoffs despite tariff fears. Even Google Trends data supports this — search volume for job-loss related terms hasn’t budged.

2. Gasoline demand ticked higher last week after a series of weak prints. Consumers aren’t fleeing the economy — they’re pausing, not panicking.

Disruption Watch: Global Markets Outperform, Nasdaq Oversold?

The $iShares MSCI ACWI ex U.S. ETF(ACWX)$ (All Country World ex-US) just outperformed the Nasdaq Composite by +3 standard deviations over the past 100 trading days.

$ACWX

That’s extremely rare. Could this set up a reversion-to-the-mean trade? Possibly — especially if US tech earnings continue to stabilize and rate-cut expectations grow.

Investor Takeaway: This Rally Has Legs — But Watch the Ground Beneath

The Fed’s dovish hints and Alphabet’s earnings are giving bulls some fuel, but structural risks remain:

• The economy is not yet rolling over, but neither is it accelerating.

• Companies are operating without a map due to volatile trade policy.

• Stocks have bounced sharply — but many still aren’t pricing recession.

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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.