S&P 500 Market Update

The S&P 500 wrapped up just shy of its highest point ever following the Federal Reserve’s interest rate cuts. Yahoo Finance’s Jared Blickery has a few insights on the current trends.

Thank you, Josh. It seems there was a positive reception to Paul’s comments, which led us into a discussion about small-cap stocks. Let’s dive into the Russell 2000 results. Interesting spike around 2 PM today—enough to push the Russell 2000 to a new intraday high. I think what really energized the small-cap stocks was Powell’s discussions during the press conference. Though it did finish lower than its peak, it still outperformed the larger-cap stocks by a notable margin. In fact, it wasn’t just the small-cap stocks; micro-cap stocks also performed exceptionally well. The CRSP US Microcap Index even achieved a new record high today. And just as a side note, this marks the first all-time high for the Russell 2000 on a Fed day since November 2021. It’s been four years of minimal movement for it, which makes you wonder, right? Oh, and we hit a national record as well; if you’re tracking an ETF covering various countries—like Spain, Switzerland, and even Canada—it was quite a global experience.

Alright, some records there. Are there any others you want to mention?

Absolutely. Let’s look at Cisco, particularly regarding the Dow Jones Industrial Average. There were some records today in the Dow, with firms like Goldman Sachs and Caterpillar doing well. But back to Cisco. I’ve got a long-term chart here, dating back to the 1980s. If you examine it closely, you can see that today, it ended above its peak from 2000, if I remember correctly, that was March 2000. It’s sort of a cautionary tale about major stocks like Cisco—they can, I think, sometimes get a bit overhyped. This brings us to a clip from our guest, Wu Kai Wu, who recently discussed stocks and their underlying factors. Let’s see what he has to say.

You see, we’re looking at a massive theme here—about $400 billion that the major hyperscale companies are investing in AI across various sectors. This includes utilities and construction, and there’s quite a ripple effect on the economy and labor market. I know, it’s tempting to consider factors like today’s Fed decisions and tariffs, but I believe this overarching theme is the most significant one in the market right now. The so-called “Magnificent Seven” stocks are up around 27% over the past decade, really contributing to the broader market performance.

This episode featuring Wu will be available tomorrow morning. He’s with Sparkline Capital, and they do some really commendable research.

How about Bitcoin? Did you have any thoughts on Powell’s statements regarding it?

Interestingly, Bitcoin hasn’t really moved much. It saw a slight spike but then returned to where it was. The connection here is curious—while small-cap stocks are reacting to various market pressures, Bitcoin seems largely unresponsive to traditional market movements. I’ve mentioned this before; Bitcoin seems to be trading technically, meaning there’s a predictability to its trading patterns. In the short and maybe medium term, it looks like shorts could take precedence. However, the long-term outlook remains ambiguous, with the $75,000 target still up in the air.

So, it’s finally Federal Reserve Day. I feel like it’s time to check the dollar figures.

Do you have a moment for that? Because the dollar dropped significantly today, experiencing its biggest decline in months. I don’t think there’s much time left, but just a heads up—it dropped about 0.5% in dollar terms, which alleviates some pressure. That’s somewhat of a positive sign.

Thanks for that insight.

Of course!