Powell’s Pivot: Markets Surge

Fresh news and strategies for traders. SPY Trader episode #1346.
Markets experienced a volatile week, initially declining before surging on Friday following Federal Reserve Chair Jerome Powell's dovish speech. Powell signaled a possible interest rate cut at the September meeting, citing job market risks, which spurred broad market gains across the S&P 500, Dow, Nasdaq, and small caps. Energy and Real Estate led sector performance, while tech rebounded from earlier losses. Despite ongoing inflationary pressures and a softening labor market, the Fed's pivot suggests a cautiously optimistic outlook. Recommendations include maintaining broad market exposure, overweighting ratesensitive sectors, selective tech, and fixed income for stability, while cautioning against inflation, labor market deterioration, and political volatility.