Day 167: Rate Cuts + Trump 2.0 Day 121

MARKET WRAP | Tuesday, May 20, 2025
Tech pulls back amid earnings fatigue - Tesla bucks the trend.

The market leaned red today as investors paused to catch their breath. The S&P 500 dipped -0.44%, weighed down by mega-cap techs and cautious sentiment ahead of upcoming Fed speakers.

Winners:
• TSLA $Tesla (TSLA.US)$ led the pack, climbing +1.90%, extending yesterday’s momentum as the EV giant eyes support near $340.
• GOOGL $Alphabet-A (GOOGL.US)$ gained +0.48%, showing resilience despite broader weakness.
• VIX $CBOE Volatility S&P 500 Index (.VIX.US)$ slightly eased -0.39%, reflecting a muted fear response despite red across the board.

Under Pressure:
• NVDA $NVIDIA (NVDA.US)$ (-1.22%) and AMZN $Amazon (AMZN.US)$ (-1.15%) led the downside, with profit-taking kicking in after recent strength.
• MSFT $Microsoft (MSFT.US)$ (-0.60%) and META $Meta Platforms (META.US)$ (-0.50%) also retreated, suggesting a short-term stall in AI enthusiasm.
• AAPL $Apple (AAPL.US)$ (-0.52%) stayed stuck in tight range-bound trading.

Observations:
• The SPX $S&P 500 Index (.SPX.US)$ held near the 5930s but failed to break resistance, hinting at consolidation.
• MACD divergence in names like NVDA and AMZN suggests momentum is fading, and a sideways trend may follow.

Strategy for Investors:
• Bullish Rotation Watch: If TSLA breaks $350, it could trigger a short-term run to $360. Momentum traders may want to take note.
• Buy-the-Dip Candidates: NVDA and MSFT near support zones offer good setups for long-term investors.
• Volatility Hedging: Although VIX is down, rising divergences call for light hedges using call spreads or protective puts.

Macro:
Investors are awaiting further Fed clarity and CPI revisions later this week. Until then, markets may stay range-bound with rotation across sectors.