Markets Drift Lower While Traders Brace For Key Fed Inflation Signal

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[Chart courtesy of MarketWatch.com]

  1. Moving the market

The major indexes kicked things off on a mixed note, while oil prices slid as traders weighed the latest developments in Iran negotiations and looked ahead to key inflation data the Fed is watching closely.

Oil was a big story. Brent crude turned lower after mediators in Qatar and Pakistan indicated that U.S. and Iranian officials had agreed on a 60-day roadmap toward a potential deal.

Prices drifted even lower after the Treasury Department gave the green light for Iranian oil sales during that period, pushing crude toward session lows.

In equities, chip stocks had a pretty solid showing. Micron stood out, jumping more than 3% ahead of its earnings report later this week. AMD and Intel joined the move, gaining about 1% and 3%, respectively.

On the flip side, SpaceX didn’t have a great day, dropping 16% and marking its third consecutive decline.

Looking ahead, the big focus is Thursday’s release of the Fed’s preferred inflation gauge—the PCE index. Expectations are that core PCE (excluding food and energy) will tick higher compared to April, which is keeping traders on edge.

That’s especially important after last week’s hawkish Fed meeting, which pulled expectations for a rate hike forward to as soon as October. Right now, the market is extremely sensitive to anything that could hint at when the Fed might actually pull the trigger.

By the close, falling oil prices weren’t enough to keep stocks afloat. Rising bond yields weighed on tech, leaving the S&P 500 and Nasdaq in the red, while the Dow barely managed to finish in positive territory. The Mag 7 notably lagged.

Elsewhere, the dollar edged higher, gold hovered around the $4,200 level, and Bitcoin chopped around—briefly hitting $65.5K before ending slightly higher.

One interesting dynamic: upside surprises in inflation are now lining up with stronger-than-expected economic data.

That complicates things for incoming Fed Chair Warsh, who may soon have to decide whether inflation is truly “transitory” or something more persistent. If it’s the latter, the risk of “catch-up” rate hikes comes into play—a scenario the market would rather avoid.

With inflation data looming and rate expectations shifting, my question is: are markets underestimating how aggressively the Fed may need to act?

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Weekly StatSheet For The ETF Tracker Newsletter – Updated Through 06/18/2026

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ETF Data updated through Thursday, June 18, 2026

How to use this StatSheet:

  1. Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
  1. Trend Tracking Indexes (TTIs)

These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.

  1. All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.

If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.

  1. DOMESTIC EQUITY ETFs: BUY— effective 5/20/2025

Click on chart to enlarge

This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +7.11% and remains in “Buy” mode, with our holdings being subject to our trailing sell stops.

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Markets Shake Off Fed Jitters, Ride Chip Surge And Iran MOU News

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

U.S. stocks got off to a strong start, with traders looking to bounce back after the prior session’s sell-off, which was triggered by the Fed hinting that another rate hike this year isn’t off the table.

While the Fed held rates steady, its more hawkish tone took some of the wind out of the market’s sails. That said, the committee itself doesn’t seem fully aligned—only about half of its members are still penciling in additional hikes this year, which adds a layer of uncertainty to the outlook.

On the sector side, semiconductors led the charge. Intel jumped 7% after President Trump announced a partnership with Apple to design chips domestically. That news lifted sentiment across the space, with Nvidia up over 1% and Micron rallying around 6%.

The early strength held throughout the day, and the major indexes finished solidly in the green. The Nasdaq led the way, while the Dow once again lagged.

Meanwhile, worries about a more hawkish Fed—and even concerns around potential new leadership at the central bank—took a back seat.

Instead, the spotlight shifted to the newly signed MOU between the U.S. and Iran, which helped lift sentiment and overshadow yesterday’s rate fears, at least for now.

Even with all the talk of broader participation in the rally, the reality is that leadership remains concentrated. The Mag7 outperformed the rest of the S&P 500 this week, helped in part by today’s strong buying activity.

In the bond market, we saw a bit of a split: short-term yields moved higher while the long end eased, with the 30-year falling below 5% and hitting its lowest level in two months.

The dollar also had a strong showing, extending gains after bouncing off its 200-day moving average. Interestingly, gold managed to finish the week unchanged despite selling pressure in the final two sessions.

Bitcoin, on the other hand, was anything but quiet—it swung sharply and ended the week lower after briefly touching $67K.

At the end of the day, this still feels like a narrow market, driven largely by momentum and a single dominant theme: AI, and the demand for power, compute, and memory. That theme continues to power through just about every headwind thrown its way.

So, will the Iran MOU add a second tailwind that helps sustain this rally—or is the market still leaning too heavily on the same old drivers?

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Markets Rattle After Hawkish Fed Surprise Shifts The Mood

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The Dow kicked things off on a strong note, hitting a fresh intraday all-time high as oil prices ticked higher and traders waited on the Fed’s latest decision.

Oil got a bit of a boost after Trump said a deal with Iran still isn’t finalized, warning the U.S. could “go right back to dropping bombs” if it doesn’t meet expectations. That’s a shift from earlier this week when energy prices slid on news of a potential agreement to end the conflict.

On the geopolitical front, there was some cooling in tensions elsewhere, with Pakistan’s Prime Minister Sharif confirming that military operations have stopped, and a formal signing ceremony set for Friday in Switzerland.

Meanwhile, all eyes were on the Fed. This marked the first decision under new Chair Kevin Warsh, and while markets expected rates to stay put in the 3.5%–3.75% range, there was still plenty of nervous anticipation—especially with political pressure building for rate cuts, even as growth and inflation dynamics remain tricky.

Initially, things looked calm. The Fed did hold rates steady as expected. But then came the shift: the central bank scrapped its forward guidance and dropped its easing bias altogether.

Instead, the message turned clearly hawkish, emphasizing its commitment to price stability. With nine policymakers now leaning toward higher rates and at least one hike this year looking likely, markets didn’t take it well.

That was the turning point. What started as a quiet session quickly unraveled, with stocks sliding across the board and metals following suit.

Short-term bond yields spiked, the dollar surged, and gold took a hit—falling back below $4,250. Bitcoin was just as volatile, popping higher at first before reversing sharply and dropping below $64.5K.

All in all, markets are looking a bit fragile right now. Trading volumes are elevated, but liquidity is thin—and that combination can amplify moves, especially as we head into the quieter summer months.

I am pondering: was this just a knee-jerk reaction, or are markets starting to price in a tougher road ahead?

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Mixed Markets: SpaceX Soars, Tech Slides, Oil Drops

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

The S&P 500 started the day pretty flat, while the Dow was still riding the momentum from its fresh record close in the previous session, helped by optimism around a potential U.S.–Iran deal.

One of the biggest stories was SpaceX, which kept its post-IPO hype going with another 10% jump. The move briefly pushed its market cap past both Microsoft and Amazon during the session—pretty wild for a company that just went public last week.

Meanwhile, oil continued to slide. Brent crude dropped about 3% to around $80 per barrel, even dipping below that level briefly for the first time since March.

Easing geopolitical tensions, including news that Pakistan and its counterpart agreed to end military operations, added to the downward pressure. There were also comments about the Strait of Hormuz reopening, which helped accelerate the drop in oil prices.

Despite the generally upbeat backdrop, investors aren’t exactly worry-free. Inflation remains the top concern for 34% of traders, while 28% are increasingly uneasy about a potential AI bubble forming.

By the closing bell, the story was mixed. The Dow managed to hold onto gains, but tech stocks struggled, dragging the S&P 500 and Nasdaq into the red.

Even falling oil prices couldn’t give tech much of a lift, though consumers may welcome some relief at the gas pump.

In other markets, bond yields moved lower, with the 30-year dropping well below 5% to its lowest level since April. The dollar softened, gold edged slightly higher, and Bitcoin slipped back below $66K.

Now, with the FOMC meeting up next and triple witching later this week, the big question is whether the AI-driven momentum can keep carrying the market—or if these headwinds will finally start to bite.

So, will bullish sentiment keep winning out, or are we about to see a reality check?

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Bitcoin Pops, Gold Rebounds As Dollar Weakens

Ulli Uncategorized Contact

[Chart courtesy of MarketWatch.com]

  1. Moving the market

Stocks came out strong in early trading, kicking off the holiday‑shortened week on a high note after President Trump announced that an agreement had been reached to end the conflict between the U.S. and Iran.

The Dow jumped about 630 points (1.2%) and even tagged a fresh intraday all‑time high.

Meanwhile, SpaceX kept the momentum going—rallying more than 7% after its massive 19% surge during Friday’s market debut.

Over the weekend, Trump posted that the deal with Iran was “now complete.” It’s expected to be formalized as a memorandum of understanding (MOU), with a signing set for Friday in Switzerland, according to Pakistan’s Prime Minister Sharif.

Of course, it’s still early days—there’s plenty of fine print left to hash out before everything is finalized.

The timing of the announcement was notable, coming right after fresh tensions in the Middle East, including exchanges of fire involving Israel and Hezbollah, had cast doubt on whether a deal would get done at all.

On the energy front, Trump also authorized the reopening of the critical Strait of Hormuz, which sent oil prices sharply lower. Vice President JD Vance added that the goal is to keep the passage open toll‑free for the long term. As a result, U.S. crude dropped about 5%, hovering near $80 per barrel.

Back in equities, leadership flipped a bit—this time the Mag 7 clearly stole the spotlight, outperforming the rest of the S&P 500 by a wide margin.

Bond yields were mixed, while the dollar slid to its lowest level since June 5. Gold extended its rebound, climbing back above $4,300 after dipping close to $4,000 just a few days ago.

Crypto joined the party as well. Bitcoin was in full “rip” mode, jumping nearly 5%, pushing past $67K, and logging its best day since early March.

While the technical setup has supported this steady squeeze higher in risk assets over the past couple of months, it’s worth remembering that leverage remains elevated. If markets start to wobble, any downside move could accelerate quickly and turn into a sharper selloff.

The big question now is: does this rally have more room to run, or are we setting up for a volatility spike if sentiment suddenly shifts?

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