Sosnick: The Fed is likely to temper enthusiasm over future rate cuts

Market Sentiment and Fed Rate Cut - The market is anticipating a Fed rate cut, with a significant psychological impact expected if it does not occur, leading to potential disappointment among investors [2][3] - There is a strong expectation for cuts, with a 100% positive attitude towards them, but the Fed may temper future enthusiasm due to ongoing inflation concerns [2][3] Inflation and Economic Indicators - Inflation measures, particularly core PCE and core CPI, are edging higher, moving closer to 3% annualized, which may influence the Fed's decision on rate cuts [3][4] Technology Sector and Nvidia - Nvidia is under investigation for allegedly violating anti-monopoly rules in China, which has put pressure on the stock and the broader chip sector [9][10] - The chip sector has been a key driver of market gains recently, but ongoing trade tensions and investigations could create volatility [6][7] Financial Sector Outlook - The financial sector is nearing a 52-week high, with banks potentially benefiting from a steeper yield curve if rate cuts occur [11][12] - There is a possibility that some banks may have gotten ahead of themselves in their stock performance, particularly larger banks, while smaller banks may still have room for growth [14] Tech Sector Concerns - There are concerns about a potential bubble in the tech sector, particularly following Oracle's results, which were heavily influenced by a single customer, OpenAI [15][16] - The significant cash burn associated with OpenAI raises questions about the sustainability of such projections and the overall health of tech investments [17][18]