I’d pick A — but the deeper story is not that the Fed suddenly turned dovish. The Fed just raised rates to 3.75%–4.00%, while signaling inflation remains elevated.
Thursday’s rally was more about financial conditions. When the 10-year yield slipped back below 5%, the discount-rate pressure on long-duration tech stocks eased. Falling oil added another layer of relief by reducing inflation concerns.
That explains why semiconductors led the rebound: when yields fall, high-growth companies with strong earnings expectations can re-rate quickly.
The real test now is whether the 10-year can stay below 5%. If yields rise again, Thursday’s relief rally could quickly face another valuation squeeze.
My vote: A — yields are the key variable to watch.
@WallStreet_Tiger [龇牙]
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