The Dow retreated over 200 points on Wednesday night following the CPI print and the weak oil sector, but it remains within striking distance of a new high. Stocks are absorbing a less dovish Fed, which is being supported by economic data, showing they can trade towards new highs on earnings alone without the sugar hit of multiple rate cuts. We wouldn’t be surprised to see the Fed sit on its hands throughout 2025, but this is no longer a surprise for investors. Fed Chair Jerome Powell testified before the House Committee on Financial Services on Wednesday and said the latest CPI data is a reminder that the Fed has made “great progress” towards bringing inflation closer to its 2% target but is “not quite there yet.”-prudent commentary. We believe risk markets can go higher, but their trajectory will be choppier than the last two years.
- The Dow looks poised to make fresh highs in the coming weeks, but we wouldn’t be chasing the move from a risk/reward perspective
MM is neutral towards US stock’s short term
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