1. Moving the market

Equities started the day on a downward trend as traders eagerly awaited the Fed’s policy decision tomorrow.

They were also tracking global news for any signs of progress on potential trade deals. Tech giants Nvidia and Meta, along with Tesla, saw declines. Tesla’s new car sales in Britain and Germany fell to their lowest levels in over two years, despite increasing demand for electric vehicles.

The Fed began its two-day meeting today, with a decision expected tomorrow. Anxiety remains high on Wall Street, even though a rate cut is not anticipated. The focus will be on Powell’s comments regarding the current state of the economy and his outlook.

The S&P 500, along with the broader market, faces a significant challenge at its 200-day moving average (200DMA), which has been providing strong overhead resistance. If the attempt to break through this level is unsuccessful, we may see a reversal towards the lows made in April.

With low trading volume across the board, all attempts to rally above the unchanged lines failed, and the major indexes ended the session in the red.

Bond yields slipped, the dollar continued its decline, and Bitcoin recovered from an early drop to climb back above $95,000. Gold had another impressive performance, gaining over 3% and reclaiming its $3,400 level.

The markets are at a crossroads and could break either way. As ZH pointed out, price action is mainly driven by short-term headlines and speculation on the evolving US tariffs story.

1. Moving the market

The markets pulled back early in the session as hopes for new trade deals diminished following President Trump’s announcement of surprise levies on movies made outside the U.S.

He elaborated on negotiations with various countries, emphasizing that he is setting the terms of any agreement. Additionally, he made it clear that there are no plans to talk to China, which affected traders’ expectations of progress.

This week, the Fed’s two-day policy meeting begins tomorrow, with a rate decision expected on Wednesday. Futures indicate only a 3.2% chance of a rate cut, but traders will be closely analyzing any commentary from Fed Chair Powell.

Despite efforts by traders and algorithms to maintain a nine-day winning streak, the market closed in the red due to a last-hour selloff. Mixed economic data lowered rate-cut expectations, and the dollar continued to weaken.

Mega-tech stocks and the Mag7 basket managed to recover from early losses but still ended the day in the red. Bond yields rose moderately, oil prices plunged, and Bitcoin retreated.

The standout performer of the day was gold, which rallied 3% and nearly reached the $3,350 level.

Does this indicate that its recent correction is over?

1. Moving the market

An early stumble interrupted April’s comeback rally as bad news about the U.S. economy pulled the markets down.

First-quarter GDP declined by 0.3%, a sharp reversal from the 2.4% increase in the fourth quarter. The Commerce Department report also showed a slowdown in consumer spending and a decline in government spending, the latter being a result of DOGE cuts.

A separate private payroll report from ADP signaled a slowdown in that sector, with private payrolls in April growing by only 62,000, well below the estimated 120,000. This dampened bullish sentiment, which had pulled the S&P 500 out of an 11% tailspin, leaving the index down only around 1% for the month.

In the end, the Dow, and the S&P 500 managed to crawl back out of their early hole to close slightly in the green, helped by a last-hour melt-up. It was a choppy end to a choppy month, described by ZH as a 16% peak-to-trough drawdown followed by an 18% rally in the last few weeks.

Growth and inflation data surprised to the downside, pushing the much-feared stagflation scenario to the back burner, at least for now. The most shorted stocks dumped after the opening but were squeezed higher as dip buyers stepped in.

With weak macro data, it came as no surprise that rate-cut expectations surged while bond yields slipped. The dollar dropped over 4% during April, its worst performance since November 2022.

Gold moved in the opposite direction, gaining almost 6%, marking its fourth straight monthly rise, while Bitcoin rallied 14% for the month, its best performance since November, according to ZH.

It seems we are back to “bad news is good news,” as far as stocks are concerned, with bonds, crude oil, dropping U.S. inflation, and copper pointing to a recession, while rate-cut expectations are jumping higher along with equities.

1. Moving the market

The major indexes opened flat and remained close to their initial levels in early trading, as Wall Street awaited updates on trade deal negotiations.

While the Treasury Secretary mentioned productive discussions with Japan and hinted at a potential “framework” agreement with India, the absence of details regarding China put pressure on the markets.

General Motors saw a decline despite reporting better-than-expected profits, as the automaker announced it was reassessing future guidance and suspending additional share buybacks due to uncertainties surrounding levies and rising global tensions.

Big Tech will be in the spotlight tomorrow and Thursday, with Meta, Microsoft, Apple, and Amazon set to report their quarterly results.

Of the more than 36% of S&P 500 companies that have reported so far this season, approximately 73% have exceeded expectations, according to FactSet. This is slightly below the 5-year average of 77%.

Despite market volatility, bullish sentiment emerged midday, leading to a rebound and another positive close for the major indexes. The theme of the day was “bad news is good news,” as weak macroeconomic data increased expectations for rate cuts.

Bond yields fell again, the dollar remained stable, but gold slipped while successfully defending its $3,300 level. Bitcoin edged higher, maintaining its $95k level, and continued to see significant inflows into its ETFs.

Have traders and investors recognized this chart, which seems to indicate that Bitcoin’s next major advance is imminent?