Market Memo

Last week the market genuinely felt like it had zero idea what direction it wanted to go in, starting off with a ton of optimism before completely switching vibes by the end and leaving investors kind of drained. Early in the week, stocks were actually doing really well, with the S&P 500 and Dow putting up their strongest single day gains in months because there was this growing belief that tensions in the Middle East might finally start cooling off(spoiler alert it did not cool off), and that immediately pushed oil prices down below $100 for a bit, which helped boost consumer focused sectors like travel, airlines, and leisure, so for a moment it looked like everything was lining up for a solid rebound and people were getting a little too comfortable. But as usual, that momentum didn’t last because the market remembered the bigger picture, and the whole higher-for-longer interest rate narrative came right back into play and basically killed the mood. The Federal Reserve decided to hold rates steady between 3.50% and 3.75%, which wasn’t shocking, but Jerome Powell made it pretty clear that even though rate cuts could happen sometime in 2026, it’s all going to depend on inflation actually stabilizing and energy prices not going crazy again, so investors quickly realized there’s still a lot of uncertainty ahead and no easy pivot coming anytime soon. I am genuinely telling you, ask anybody in the market to choose between low interest rates or a billion dollars they will choose the low interest rates. As I was saying, as the week went on, that initial confidence kept fading, and by the time Friday hit, most of the early gains had been wiped out as oil supply concerns started creepily sliding back into the market’s DMs. The S&P 500 ended up falling below its 200-day moving average for the first time in nearly a year, which is one of those signs that people take seriously, and small stocks just kept getting hit, sliding deeper into correction territory without much resistance. At the same time, you could clearly see a shift in where money was going, with investors moving into safer assets like gold and even Bitcoin as a way to hedge against all the uncertainty, which just shows that confidence wasn’t exactly strong by the end of the week(I think you would assume that by now). Overall, the major indexes finished down around 2%, which doesn’t sound terrible, but it felt worse because of how strong things looked at the start, and now everybody is just hoping things get better, especially before the quarter ends. If you all watch soccer, the best way to summarize this week is a typical Arsenal bottle. Hopefully next week gets better though. See you all!