05/29/25
Stocks opened flat on Wednesday and went positive early, but after Tuesday's big rally there were some profits to be taken, especially with Nvidia earnings coming out after the closing bell. The losses were modest in comparison to Tuesday's gains but the indices did close at the lows of the day heading into Nvidia's report, which was positive. Yields and the dollar were up putting pressure on the F, S, and I-funds yesterday.
Barring any conference call surprises, the initial reaction to Nvidia's earnings after the closing bell yesterday was positive. They were trading up 4 to 5% shortly after the release, and that conference call may be packed with a lot of new information.
This comes on the heals of a report from the Financial Times before the closing bell yesterday that the Trump administration is ordering U.S. Chip designers to stop selling to China, so that's a lot of news for the market to decipher today.
Also yesterday, in the Fed's FOMC Meeting Minutes, the Fed officials indicated concern over tariff increases driving up prices and might cause higher inflation, and they mostly agreed that economic uncertainty warranted no change in their wait-and-see policy stance.
All of this added up to choppy, mostly negative day, but after Tuesday's big gains, some backing and filling wasn't a bad thing, especially heading into Nvidia's earnings report yesterday, which had tariff implications that may change sentiment, but so far, after the initial reaction to that earnings report, investors are showing signs of relief.
The 10-year Treasury Yield was up modestly yesterday to 4.48% and that changed nothing so it was business as usual, but small caps did lag on the higher yields and the Fed's less dovish outlook.
The dollar (UUP) was up as well and that held the I-fund on the day. UUP opens today up against some key resistance.
Are you a chartist? Does this chart look bullish or bearish to you? Is it going up from here, or down? The head and shoulders pattern is generally a bearish formation, and it is back below the 200-day EMA and failed at the average when it tried to rebound last week. So what is it?
It an inverted chart of the S&P 500 (C-fund). I use this feature in the charting software when I am worried that I am being biased. Sometimes I will see a chart and its inverse and think both look like they want to go higher (or lower), and that's being biased. These two charts are pretty clear. One is bearish and one is bullish.
Up next this week in economic data is the GDP, PCE inflation data, Chicago PMI, and the final Michigan Consumer Sentiment reading for May.
Update: After completing this commentary on Wednesday evening, news came out that topped even the Nvidia earnings story:
"Federal trade court strikes down Trump’s reciprocal tariffs"
The futures were up dramatically after this was released and I will just post the key points with a link to the story on CNBC.com:
* A federal court struck down President Trump’s reciprocal tariffs in a ruling out Wednesday.
* A three-judge panel on the Court of International Trade said President exceeded “any authority granted” by the International Emergency Economic Powers Act.
* The suit was brought on behalf of five U.S.-based businesses that rely on imports.
https://www.cnbc.com/2025/05/29/court-strikes-down-trump-reciprocal-tariffs.html
The DWCPF (S-fund) looks bullish as well but it can't seem to catch up to the large caps, which has been disappointing to many investors who came into this year expected several interest rate cuts from the Fed, which could have been a wind at the backs of smaller companies. Tuesday showed us that the gains can be magnified, and yesterday showed us that losses are are also more extreme.
ACWX (I-fund) was down and the rally in the dollar kept the pressure on. It's back below the rising support line, but the last time that broke, it jumped back above it a couple of days later. Now there's been 3 closes below that line in the last 4 days.
BND (bonds / F-fund) slipped back below its 50-day EMA, but right now does not seem like the time to be trading bonds. We should be paying attention to them, but there's much more going on in the stock market.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
Stocks opened flat on Wednesday and went positive early, but after Tuesday's big rally there were some profits to be taken, especially with Nvidia earnings coming out after the closing bell. The losses were modest in comparison to Tuesday's gains but the indices did close at the lows of the day heading into Nvidia's report, which was positive. Yields and the dollar were up putting pressure on the F, S, and I-funds yesterday.
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Barring any conference call surprises, the initial reaction to Nvidia's earnings after the closing bell yesterday was positive. They were trading up 4 to 5% shortly after the release, and that conference call may be packed with a lot of new information.
This comes on the heals of a report from the Financial Times before the closing bell yesterday that the Trump administration is ordering U.S. Chip designers to stop selling to China, so that's a lot of news for the market to decipher today.
Also yesterday, in the Fed's FOMC Meeting Minutes, the Fed officials indicated concern over tariff increases driving up prices and might cause higher inflation, and they mostly agreed that economic uncertainty warranted no change in their wait-and-see policy stance.
All of this added up to choppy, mostly negative day, but after Tuesday's big gains, some backing and filling wasn't a bad thing, especially heading into Nvidia's earnings report yesterday, which had tariff implications that may change sentiment, but so far, after the initial reaction to that earnings report, investors are showing signs of relief.
The 10-year Treasury Yield was up modestly yesterday to 4.48% and that changed nothing so it was business as usual, but small caps did lag on the higher yields and the Fed's less dovish outlook.
The dollar (UUP) was up as well and that held the I-fund on the day. UUP opens today up against some key resistance.
Are you a chartist? Does this chart look bullish or bearish to you? Is it going up from here, or down? The head and shoulders pattern is generally a bearish formation, and it is back below the 200-day EMA and failed at the average when it tried to rebound last week. So what is it?
It an inverted chart of the S&P 500 (C-fund). I use this feature in the charting software when I am worried that I am being biased. Sometimes I will see a chart and its inverse and think both look like they want to go higher (or lower), and that's being biased. These two charts are pretty clear. One is bearish and one is bullish.
Up next this week in economic data is the GDP, PCE inflation data, Chicago PMI, and the final Michigan Consumer Sentiment reading for May.
Update: After completing this commentary on Wednesday evening, news came out that topped even the Nvidia earnings story:
"Federal trade court strikes down Trump’s reciprocal tariffs"
The futures were up dramatically after this was released and I will just post the key points with a link to the story on CNBC.com:
* A federal court struck down President Trump’s reciprocal tariffs in a ruling out Wednesday.
* A three-judge panel on the Court of International Trade said President exceeded “any authority granted” by the International Emergency Economic Powers Act.
* The suit was brought on behalf of five U.S.-based businesses that rely on imports.
https://www.cnbc.com/2025/05/29/court-strikes-down-trump-reciprocal-tariffs.html
The DWCPF (S-fund) looks bullish as well but it can't seem to catch up to the large caps, which has been disappointing to many investors who came into this year expected several interest rate cuts from the Fed, which could have been a wind at the backs of smaller companies. Tuesday showed us that the gains can be magnified, and yesterday showed us that losses are are also more extreme.
ACWX (I-fund) was down and the rally in the dollar kept the pressure on. It's back below the rising support line, but the last time that broke, it jumped back above it a couple of days later. Now there's been 3 closes below that line in the last 4 days.
BND (bonds / F-fund) slipped back below its 50-day EMA, but right now does not seem like the time to be trading bonds. We should be paying attention to them, but there's much more going on in the stock market.
Thanks so much for reading! We'll see you back here tomorrow.
Tom Crowley
Read more in today's TSP Talk Plus Report. We post more charts, indicators and analysis, plus discuss the allocations of the TSP and ETF Systems. For more information on how to gain access and a list of the benefits of being a subscriber, please go to: www.tsptalk.com/plus.php
Questions, comments, or issues with today's commentary? We can discuss it in the Forum.
Daily Market Commentary Archives
For more info our other premium services, please go here... www.tsptalk.com/premiums.php
To get weekly or daily notifications when we post new commentary, sign up HERE.
Posted daily at www.tsptalk.com/comments.php
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We may use additional methods and strategies to determine fund positions.
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