MARKET WRAP

Stocks opened lower, attempted a few rallies, but ultimately closed lower for the second straight day. Most folks are awaiting the Fed tomorrow, so large moves early in the week were not expected and even today’s selling finished above the lows of the day. On the Day: SPX -0.8%, QQQ -0.9% and IWM -1.1%. Gold was higher again today and as Guy mentioned on today’s MRKT Call, probably not great for other assets if it makes new highs again. Oil rebounded, and the 10Y yield drifted lower, now 4.31%. DXY was lower, now back near $99. The VIX picked up a bit into tomorrow’s FOMC, now back near 25.

After hours: Earnings after the close: AMD is higher +4%, SMCI is down -4% and RIVN is -2%.

• MRKT Call: Discussion of Paul Tudor Jones’ bearish call, Goldman Sach’s bear market rally theories and more.

• RiskReversal Pod: Mike Novogratz of Galaxy Digital, joins Guy to discuss the company's long-awaited listing, crypto's Future, the dollar decline, market risks and more.

MRKT MATRIX: STOCKS LOWER ON TRADE UNCERTAINTY

• Dow drops 300 points as investors await trade deals, Fed decision (CNBC)

• EU Targets €100 Billion of US Goods With Tariffs If Talks Fail (Bloomberg)

• Paul Tudor Jones says stock market will hit new lows even if Trump cuts China tariffs to 50% (CNBC)

• Goldman Says Bear Market Rallies Are the Norm (⁠Bloomberg)

• AMD, Arm Offer Window Into AI Landscape Ahead of Nvidia Earnings (⁠Bloomberg)

• Apple Won’t Be Able to Avoid Price Hikes for Long (⁠WSJ)

WHAT’S NEXT?

The broader backdrop remains one of low volatility and a general “wait and see” posture ahead of tomorrow’s FOMC rate decision at 2 p.m. ET. While the odds of a rate cut are effectively zero, traders will be closely watching the statement language (not expected to change much) and Fed Chair Powell’s press conference at 2:30 for any shifts in tone.

For now, the options market reflects a relatively contained setup—supportive on small pullbacks and offering resistance to the upside, which makes a sharp rally from here unlikely. An unexpected reaction to the Fed to the downside, especially if it carries into Thursday’s open, could stir volatility, but as it stands, the VIX still below 25 suggests traders are bracing for some movement without pricing in anything extreme. A hundred and fifty points lower from here on the SPX might be enough to break that calm, but until then, the tone remains steady, if cautious, between news cycles.

• Wednesday, May 7:

• SPX Expected Move: 1%

  • Earnings Pre-Market: DIS 6.2%, UBER 7%, NVO 6.5%,

  • 2pm - FOMC Rate Decision

  • 2:30pm - Powell Presser

  • Earnings After Hours: CVNA 12.5%, OXY 4%, APP 18.5%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Beware Bear Market Rallies?

• Analysis: SPX, VIX, Gold, PLTR, AMD 

• Chart of the Day: Data Centers drive record surge in tech investment

• Earnings Previews: AMD, SMCI, EXPE, DIS

• Your Questions Answered:

  • Can you opine on the record buybacks that we’ve seen in the market lately?

  • Does the market need at least one tariff deal soon, and if not another crash before end of May?

  • What does OpenAI’s not for profit news mean for mean for the AI trade?

  • If gold continues it trajectory what does it mean for commodities?

Learn more about our sponsor, FactSet.

Watch RiskReversal Podcast’s newest episode: Mike Novogratz: Crypto's Future, Dollar Decline & Market Risks

Novogratz shares insights into the challenges faced over the past four and a half years, including interactions with the SEC and the impact of the Biden administration's policies on the crypto sector. They delve into the significance of the listing for Galaxy Digital, the resilience developed by the company, and their diversification into the data center business. The conversation also touches on macroeconomic themes such as the U.S. stock market, the impact of tariffs, the state of the bond market, and the evolving role of the U.S. dollar. Additionally, Novogratz provides his perspective on Bitcoin and the broader cryptocurrency market, including the potential for a BRICS stablecoin backed by gold and the implications of fiscal policy on asset prices.

Learn more about our sponsor Current and RBC Capital Markets.

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