As expected the Fed cut by 25bp yesterday with Powell reiterating his Jackson Hole comments that the risk profile had shifted towards employment downside and the reasonable base case is that tariffs will be only a one-time shift in prices. At the end of the day the S&P 500 finished slightly lower but right around the levels it was trading at the entire day prior to the Fed event. Treasury yields rose on a sell-the-news move. S&P futures were trading modestly higher in the early morning hours but began to rise further as European markets opened strongly. Treasury yields had been reversing yesterday’s increase, falling 2-4bp across the curve. After solid economic data from weekly claims and the Philly Fed survey before the Open, yields reversed again and began to climb, while futures headed lower. The S&P opened up 0.4%, moved slightly lower but halted the downside momentum and started climbing again. After nearing 6600 we’re trading in a tight range through noon, currently up ~0.5%. The Russell 2000 is stealing the show, up ~2%. Higher beta areas like crypto-related equities are seeing solid gains. The big corporate news was Nvidia’s $5B investment in Intel. which ripped higher, taking other semi names along for the ride. Tech, especially semis, and Industrials are the leading sectors. Industrials are seeing broad strength and benefitting from tech tailwinds (eg electrical infa, construction machinery). Rail names are higher. Staples and Energy (oil lower) are lagging and are the only sectors meaningfully down. Treasury yields have been a bit volatile but are currently flat-to-up slightly from yesterday. The US Dollar Index is following up on yesterday’s gains. The Euro is trading back towards $1.18 after getting above $1.19 yesterday, and the Yen is weaker as well.

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