Dow and S&P set new all-time highs yesterday. We’re seeing a little profit-taking this morning.
The big winners yesterday are giving some back this morning. This is a normal reaction, and the trend remains positive. What we’re seeing is the swing factor of Mega Tech, where the Magnificent 7 remains negative YTD, including being up 0.7% today, led by NVIDIA being up 3% today, finally in the green YTD.
Hanging over the market is the ruling by the Supreme Court expected to be announced this Friday regarding the legality of the tariffs Trump has implemented. If the decision is that Trump overstepped his authority, it will bring a great deal of uncertainty as to how it will be unwound. The Trump administration remains confident that they have other administrative avenues to keep the tariffs in place if the ruling comes in against the tariffs. Prediction markets are skewed at over a 75% bet that the Supreme Court will rule that the tariffs are illegal, but the decision has likely already been made, and the market doesn’t appear concerned.
The precious metals market is also seeing some profit-taking. Silver is down 4.6%, copper -2.7%, platinum -7.4%, and gold -0.8%. Of note is that the Bloomberg Commodity Index will begin its annual rebalancing on Friday, where gold will be cut from its current 20% weight to 15% due to the maximum weight allowed in the index. Silver may also be reduced. This will likely bring short-term technical selling pressure.
In the energy market, crude oil has dropped to below $56.50/bbl on the news that Trump expects renewed shipments from Venezuela. Natural gas has rebounded to $3.50/mcf but is still down over 30% in the last month. The oil situation in Venezuela is evolving, to say the least.
Crypto has pulled back, with Bitcoin now $91.4K after hitting $93.7K overnight. Ethereum is down 2.5%, XRP -3.5%. There was a ruling that digital asset treasury companies can stay in stock indexes, which was feared to fuel liquidation sales if they were excluded.
The geopolitical risks are as high as ever, and the tariff ruling will further stir the pot. Nevertheless, the S&P is higher, as is the NASDAQ. The trend remains positive, and expectations for a strong economy in ’26 are still the consensus.
