After a hot CPI inflation report, the stock market rally experienced losses on Wednesday, with the Nasdaq and S&P 500 finding crucial support. Despite the market downturn, Nvidia rebounded significantly, masking broader weakness observed in small caps and key ETFs. Treasury yields spiked following the inflation report, and the Fed’s minutes from the March meeting indicated expectations of rate cuts later in the year, potentially in September.
Nvidia stock, a key player in the AI market rally, showcased resilience amidst the market turmoil, bouncing back from the 10-week line. Taiwan Semiconductor also showed strength, reporting robust sales and positioning itself to build the right side of a base. Other companies like Astera Labs, Nutanix, Axon Enterprise, and Microsoft also demonstrated positive momentum. The outlook for rate cuts in 2023 shifted, with markets now anticipating the first easing in September and even considering the possibility of no rate cuts in 2024.
Looking ahead, the focus shifts to economic data releases, including the March producer price index and weekly jobless claims set to be unveiled on Thursday. The market rally found some support on Wednesday, with key indices like the S&P 500 and Nasdaq receiving backing from certain leaders. However, caution is advised, as the market remains under pressure, and it’s essential to have exit strategies in place while monitoring emerging bases and stocks with strong relative strength.
