The S&P 500 briefly broke above 7,000 for the first time ever today as investors listened to your inspirational desk mug and decided to keep calm and carry on.

The expectation that the Fed will eventually lower interest rates this year—although not today—has helped fuel the rally this month. And investors are optimistic that a batch of Silicon Valley earnings from three members of the Mag 7 tonight will yield good news and keep the market humming.

But the S&P 500 got its final big boost over the finish line this morning following strong reports from AI trade stalwarts like ASML, SK Hynix, and Texas Instruments. It certainly didn’t hurt that Nvidia got the green light from regulators to sell its H200 chips in China.

Bullion’s bullish ascent

The S&P 500 isn’t the only index breaking records these days. The Russell 2000 has gained 6.14% since the start of the year—outpacing the S&P 500’s gain of 1.94% over the same period. Small-cap stocks are crushing their larger peers as investors anticipate strong economic growth in 2026.

Of course, it hasn’t been all smooth sailing for stocks both large and small. The capture of Nicolás Maduro, coupled with the threat of new tariffs just last week, has kept investors on their toes. But while stocks endure a bumpy ride, gold has continued to shine amid the chaos.

The safe haven asset has jumped 19.54% over the past month, propelling it above $5,300 per ounce for the first time ever today. Geopolitical fears have helped buoy the hot commodity, as has a decline in the US dollar (more on that later).

In fact, gold is surging so much that the S&P 500 is moving lower relative to gold, according to Stifel’s chief equity strategist Barry Bannister. That isn’t exactly an encouraging sign: according to Bannister, there have only been four instances that stocks have lagged gold in the past century, and each time it was a signal that the stock market was about to plateau.

But hey, maybe the fifth time’s the charm.—LB

🟢 What’s up

• Seagate jumped 19.14%, Western Digital popped 10.7%, SanDisk climbed 9.6%, and Micron Technology rallied 6.1% as analysts flagged durable, long-run demand for storage products.
• Intel gained 11.04% on reports that Nvidia and Apple are planning to shift some chip manufacturing away from TSMC and toward Intel.
• AT&T rose 4.65% following a Q4 beat and a full-year outlook that came in above forecasts.
• Texas Instruments advanced 9.94% after issuing a stronger-than-expected earnings forecast for Q1.
• Stride jumped 14.25% after the education company beat expectations and issued an upbeat full-year revenue forecast driven by strong demand.

What’s down

• Starbucks sank just 0.59% after missing fiscal first-quarter earnings estimates, though it did post traffic growth for the first time in two years.
• ASML fell 2.18% after reversing earlier gains despite reporting record orders and issuing strong 2026 guidance tied to the AI boom.
• Electronic connector manufacturer Amphenol slid 12.2% even after posting better-than-expected Q4 results and guidance, as lofty expectations followed a 140% rally over the past year.
• VF Corporation dropped 5.82% despite reporting strong fiscal third-quarter results.
• Defense and aircraft manufacturing conglomerate Textron slipped 7.9% after beating fourth-quarter expectations but issuing weak forward guidance.
• Qorvo fell 6.8% after topping fiscal Q3 earnings estimates but missing outlook expectations, dragging down Skyworks Solutions 7.94% amid investor focus following their recent merger agreement.

The Federal Reserve kicked off 2026 with a wake-up-and-smell-the-economy reality check, keeping interest rates parked between 3.5% and 3.75%—despite two governors (both Trump appointees) pushing for a quarter-point cut.

“The US economy expanded at a solid pace last year and is coming into 2026 on firm footing,” Chair Jerome Powell explained during the press conference. The stats back him up: unemployment has stabilized, while core PCE prices rose 2.8% in the 12 months ending in November 2025. “Inflation has eased significantly from its highs in mid 2022, but remains somewhat elevated relative to our 2% longer-run goal.”

This is the Fed’s first break in rate cuts since July, following a quarter-point trim at each of the central bank’s final three meetings of 2025. This end-of-year trifecta sent investors cheering and mortgage rates to near three-year lows, though everyone knew this rate-slashing party couldn’t last forever.

So, what now?

Although the Fed is expected to maintain this holding pattern for now, analysts are optimistic that rate ruts will return later this year.

“Amid fading tariff pressures and a sluggish labor market, I anticipate the Federal Reserve will resume its easing cycle in 2026, most likely by implementing one or two 25-basis-point interest rate cuts,” AssetMark Chief Market Strategist Kezia Samuel told Brew Markets.

Still, whether Fed chair Jerome Powell will still be around by then is unlikely, since his term ends in mid-May.

“Powell is overseeing just three more meetings, and we're not likely to see any change in short-term rates for the remainder of his tenure,” added Christian Hoffmann, head of fixed income at Thornburg Investment Management. “Any day now, I expect we’ll learn who Powell’s successor will be. Rick Rieder has been surging in prediction markets, with Kevin Warsh trailing him in second.”

While we don’t yet know who will succeed Powell, the current chair did have some advice for whoever ends up in the hot seat next: “Stay out of elected politics.”—JD

The greenback just lost some color.

Yesterday, the US dollar posted its sharpest one-day decline since April’s tariff shock, sliding to its lowest level since 2021. The move accelerated after President Trump told reporters in Iowa that he thinks the dollar is “doing great,” a remark markets took as indifference toward the currency’s weakness.

The slide in the greenback lifted other major currencies across the board. The euro and British pound rose to levels last seen in 2021, while the Swiss franc surged to its highest point in 11 years.

What does a weaker dollar mean?

• For businesses, a softer dollar can be a tailwind. A weaker currency makes US goods cheaper for overseas buyers, supporting exports, while profits earned abroad rise when converted back to US dollars. “It doesn’t sound good, but you make a hell of a lot more money with a weaker dollar than you do with a strong dollar,” Trump said last July.
• For households, the impact is less favorable. A weaker dollar lifts import prices and adds to already-sticky inflation, with the burden falling unevenly. Higher-income consumers can absorb rising costs, while lower-income households feel the squeeze, reinforcing a K-shaped dynamic where spending holds up overall but problems emerge below the surface.
• For investors, the issue is confidence. When US leaders appear relaxed about a weaker dollar, markets see less commitment to currency stability. That pushes investors to reassess the risk of holding US assets and demand higher returns to compensate. Combined with growing doubts over policy direction, debt sustainability, and the Fed’s independence, a softer dollar stance risks discouraging foreign investment.

What comes next

Some investors think this isn’t just a bad day for the buck—it’s the start of something bigger.

Cole Smead, chief executive of Smead Capital Management, told CNBC that extended periods of US market dominance have often marked turning points for the dollar. Heavy investment into US markets over the past decade, amplified by the AI boom, has left US stocks highly valued. As investors rotate toward opportunities abroad in search of better returns, those capital outflows could put sustained pressure on both the stock market and the dollar.

But Alexander Campbell, CEO of Black Snow Capital, says investors shouldn’t write the dollar off just yet. In a recent Substack post, he noted that “The fall in the dollar feels large up close, but keep in mind we are still at least 25% above where the dollar typically bottoms.” He also pointed out that even if the dollar isn’t strong, it’s still ubiquitous, and it remains the reserve currency of choice around the globe.

The dollar is still dominant in the world of finance, but anyone keeping their money in cash might be left green with envy watching other assets climb as the greenback continues to slide.—SY

• “Trump accounts” got some new boosters: JPMorgan Chase, Bank of America, and Nicki Minaj are matching workers’ $1,000 contributions.
• Amazon is laying off about 16,000 workers in its latest round of firings as it seeks to limit bureaucracy.
• German police raided Deutsche Bank offices in Frankfurt and Berlin as part of a money laundering probe.
• The Federal Reserve has not complied with grand jury subpoenas as part of the investigation into Fed Chair Jerome Powell.
• The Department of Energy announced a new initiative to level up the nation’s nuclear fuel supply chain.
• NYC Mayor Zohran Mamdani is pushing for tax hikes on the wealthiest New Yorkers in order to fill the city’s $10 billion budget deficit.

Economic reports: November trade balance, factory orders, wholesale trade sales, and initial jobless claims

Earnings announcements: Apple, Visa, Samsung Electronics, Mastercard, Royal Caribbean, Caterpillar, SAP, Thermo Fisher Scientific, KLA, Blackstone, Honeywell, ABB Ltd, Stryker, Lockheed Martin, Parker-Hannifin, Sanofi, Comcast, Altria, ING, Sandisk, L3Harris Technologies, Norfolk Southern, and Nokia

Everything else: A new season of Bridgerton hits Netflix, so grab the popcorn and enjoy some romantic, high-society hijinks