To The Moon

Markets Regain Momentum

Markets closed sharply higher as geopolitical tensions eased and rate cut expectations remained alive, albeit delayed.

Index Daily Gain with $NASDAQ(.IXIC)$ +1.4%; Dow Jones Industrial Average +1.2% (+507 points) and $S&P 500(.SPX)$ +1.1% (within 1% of all-time high)

Investor sentiment improved following a Trump-brokered cease-fire between Israel and Iran and a sharp decline in oil prices, easing concerns around inflation and global instability.

Oil, Inflation, and Optimism

• Brent crude: -6.1% to $67.14 (lowest since June 10)

• WTI crude: -6.0% to $64.37

• Gold: Down as safe-haven demand fades

Lower oil prices are good news for inflation, but not enough to accelerate rate cuts, at least according to Fed Chair Powell’s testimony this week.

Powell: Dovish, But Deliberate

Powell

Fed Chair Jerome Powell told Congress that rate cuts would be on the table, if not for tariffs. The Fed will likely wait until September to assess the full impact of potential trade actions before moving.

WSJ: “Powell said little to tee up a rate cut next month… more likely officials would wait until at least their September meeting.”

Valuations and Tech: High Hopes, Higher Hurdles

• The S&P 500 trades at 23x forward earnings, near Dot Com-era highs.

• Bulls are banking on rate cuts, AI leadership, and lower oil to justify lofty multiples.

• AI-exposed US Big Tech ( $NVIDIA(NVDA)$ , $Microsoft(MSFT)$ , $Meta Platforms, Inc.(META)$ , $Broadcom(AVGO)$ ) continues to dominate, but some investors are eyeing cheaper Chinese tech as a value alternative.

• Meanwhile, European small caps just got upgraded to overweight vs. US peers for 2025.

Tariffs, Taxes, and Trade Deals Ahead

• Tariff truce expires July 9: EU warns of retaliation if Trump’s 50% “reciprocal” tariff threat materializes.

• Trump tax deal in progress: GOP nears a SALT deduction compromise; vote expected by Friday.

• EU response tools may include counter-tariffs on Boeing aircraft and industrial goods.

Conclusion: Risks Down, But Uncertainty Lingers

Markets are cheering temporary calm, falling oil, and Powell’s steady hand, but valuation headwinds, tariff deadlines, and slow economic momentum still loom.

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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.