Powell Pulls The Rug: Late-Day Selloff Follows Dovish Hopes

Market Overview - Stocks experienced a significant rally, reaching record highs, driven by the Federal Reserve's anticipated rate cut and a surge in the tech sector, particularly Nvidia, which became the world's first $5 trillion company due to high demand for AI chips [1][2] - The S&P 500 index briefly surpassed 6,900 for the first time, reflecting strong market optimism following the Fed's quarter-point rate cut and the end of quantitative tightening [2] Federal Reserve Impact - Fed Chair Jerome Powell's announcement of a rate cut was initially well-received, but his subsequent comments about the uncertainty of another cut in December dampened market enthusiasm, causing a shift from gains to losses in many sectors [3][8] - The probability of a December rate cut dropped from over 95% to approximately 65%, leading to a selloff across various asset classes, with the exception of the tech-heavy Nasdaq [3] Sector Performance - Nvidia's historic performance was a highlight, with the stock soaring over 4%, while other tech companies like AMD and Micron also saw solid gains [1] - Bond yields increased alongside the dollar, while gold prices fell, although silver managed to close higher [4] Trend Tracking Indexes - The Domestic Trend Tracking Index (TTI) closed at +5.38% above its moving average, while the International TTI was at +11.89% above its moving average, both indicating a "Buy" signal effective on May 20, 2025, and May 8, 2025, respectively [8][9]