May 6, 2025

Markets Update:

Stock futures edged lower Tuesday as investors turned their focus to the Federal Reserve’s upcoming policy meeting — the first since President Trump proposed “reciprocal” tariffs in early April.

On Monday, the S&P 500 ended its nine-day winning streak — its longest since 2004 — falling 0.6%. The Nasdaq Composite lost 0.7%, while the Dow slipped 0.2%, reflecting continued caution around trade policy.

Tariff uncertainty remains a key pressure point. President Trump is expected to meet Canadian Prime Minister Mark Carney on Tuesday, their first official discussion since Carney took office earlier this year.

Treasury Secretary Scott Bessent told CNBC that “we’re very close to some deals,” echoing Trump’s remarks over the weekend that agreements could be finalized this week. Meanwhile, a Bloomberg report suggests India is offering zero tariffs on select goods, hinting at progress on multiple trade fronts.

Investors are now watching the Fed’s two-day meeting closely, with a rate decision expected Wednesday afternoon. Futures indicate only a 2.7% probability of a rate cut, but all eyes will be on Chair Jerome Powell’s outlook and tone.

In Asia, markets traded mixed as investors digested shifting trade dynamics and currency fluctuations. Asian currencies weakened as the U.S. dollar firmed. Chinese markets reopened after the Labor Day break, with sentiment lifted slightly by signals that the U.S. and China may be seeking a more constructive resolution to their trade conflict.

Portfolio Commentary:

The Fed meeting begins today, and we plan to stay patient through the next two sessions. Historically, the real move begins on Thursday following the Fed decision — this setup has consistently delivered some of the best trades.

While bearish sentiment continues to dominate headlines, market internals suggest a stealth accumulation is underway. The crowd may be leaning short, but the setup for a turn remains intact. We're not calling it with certainty, but the past two weeks of price action speak volumes.

Pay attention to what Palantir (PLTR) said in its earnings report — their comments on the AI cycle are critical. We're seeing strong momentum in both enterprise and federal demand for their AIP platform, and we believe their competitive moat is unmatched. This is just the beginning of a transformative cycle, especially as we move beyond the current tariff headwinds.

This sector — especially AI-driven names — will be the first to roar back when the dust settles.

Stay alert. Stay extremely patient. I cannot stress this enough — some of the best trading opportunities of the year will emerge from this environment. The tariff narrative is nearing its end.