Markets Take Rest After Several Days of Dramatic News

The major indices were close to flat on Wednesday, with breadth running negative and small caps lagging. A big move in Nvidia NVDA helped to offset losses in thousands of smaller stocks, but outside of semiconductors SMH, there wasn’t much of interest.

The S&P 500 failed for the second day to test the highs hit in February, but the Nasdaq 100 QQQ did manage a new all-time high. Momentum is slowing, and it may require some basing action before the bulls can produce a clean breakout on good volume.

Oil bounced back slightly after a sharp drop on the Israel-Iran ceasefire, but the dollar sank again while Bitcoin IBIT attracted renewed interest. Bitcoin is developing an interesting technical setup that I am watching closely for some new buys.

The primary issue now is what will be the catalyst for the next major market move. It looks like the ceasefire will hold in the Middle East, and that issue is now in the rearview mirror. There continues to be talk about trade deals and hints that something is coming soon, but the market isn’t reacting to that currently. The "big, beautiful budget deal" is being negotiated, and there may be a vote soon, but the market is not anticipating anything right now.

The major issue continues to be the health of the economy. Jerome Powell was before Congress for the second day and didn’t add anything new. The story there is that the Fed is concerned that tariffs are going to trigger an uptick in inflation, and until there is greater clarity, the Fed is not going to make any changes in interest rate policy.

There is some economic news due on Thursday, but the next major report is the May PCE inflation news that is due out at 8.30 a.m. ET on Friday. This is older data and won’t reflect much tariff activity, but investors will be watching it closely.

The market is still very healthy. It is just resting while it awaits the next catalyst.

At the time of publication, DePorre was long IBIT and NVDA.