Market News

Goldman Sachs Flags Risks Beneath Tech’s Melt-Up Rally Markets are in a holding pattern ahead of upcoming consumer price data, but tech stocks continue to dominate. The Nasdaq-100 is up 13% for the quarter, far outpacing the S&P 500’s 7.6% gain. Once-dismissed names like Nvidia, Meta, and Tesla have surged into double-digit territory. But Goldman Sachs is urging caution. In a note to clients, Peter Callahan, the firm’s technology, media, and telecom specialist, describes the Nasdaq-100 as being in “melt-up mode,” with six gains in the past seven sessions. He attributes the rally to upbeat U.S.-China trade discussions, improved economic indicators — including stronger small business sentiment — and robust earnings, notably from Taiwan Semiconductor. Goldman’s U.S. Financial Conditions Index has dropped near its yearly lows, indicating easier borrowing conditions for companies. Yet despite the positive momentum, Callahan highlights signs of instability. For example, Goldman’s TMT momentum pair trade — which bets on top tech winners while shorting laggards — has fallen 7.5% in just six days, underperforming the Nasdaq-100 by 850 basis points. Meanwhile, the Cboe Volatility Index (VIX) continues to decline, possibly understating underlying market risk. Callahan also points to weakness in recent market leaders like Netflix, Duolingo, Sea, Verisk Analytics, Spotify, Broadcom, MercadoLibre, and Carvana — all of which have posted three straight days of losses. Even traditionally stable “quality” stocks like Costco and GE are starting to underperform. He notes several emerging shifts: small-caps outpacing large-caps, cyclicals gaining over defensives, and a rebound in unprofitable tech. These trends come as markets prepare for a potential information vacuum heading into quarter-end, following key catalysts like CPI data, earnings from major TMT names, and updates on U.S.-China trade relations. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

Gold and Stocks Are Rising Together — Here’s What That Means Both gold and the S&P 500 are approaching record highs — an unusual occurrence that’s raising eyebrows on Wall Street. Why? Because these two assets typically don’t move in the same direction. Stocks tend to climb when investors feel confident about economic growth and are willing to take on risk. Gold, by contrast, is a classic safe-haven asset — a place to hide when uncertainty looms. So when both rally at once, it reflects a market caught between two competing mindsets. “It’s like watching someone eat salad and dessert at the same time,” said Adam Koos, president of Libertas Wealth Management. “Investors want to be smart — but they’re also bracing for what could go wrong.” Koos notes that while it’s possible for stocks and gold to reach new highs simultaneously, it’s not typical. When it does happen, it often signals a rare mix of optimism and anxiety — and that’s exactly what we’re seeing now. On one hand, the stock market is riding a wave of enthusiasm fueled by artificial intelligence and hopes for a “soft landing” — an economic slowdown without a recession. On the other hand, gold is rising due to deeper concerns: mounting government debt, a weaker U.S. dollar, and ongoing central bank demand. Normally, gold and the S&P 500 are somewhat negatively correlated. When they move together, it often points to underlying fears — such as inflation, currency weakness, or a Federal Reserve that may soon cut interest rates. So far in 2025, gold has been the stronger performer. As of Monday, gold futures were up nearly 27% year-to-date, hovering just 2.1% below their April 21 record. The S&P 500 has gained just 2.1%, but that includes a sharp rebound from losses tied to April’s tariff announcement. Dina Ting, head of global index portfolio management at Franklin Templeton, suggests the unusual alignment may be driven by a mix of “dovish Fed expectations, fiscal stress, and broader structural concerns.” In fact, both assets hit record highs on the same day earlier this year — February 18 — with the S&P 500 closing at 6,129.58 and gold settling at $2,949. So what’s going on? “Equities move on growth expectations like earnings and rates,” said Keith Weiner, CEO of Monetary Metals. “Gold responds more to fear — things like inflation, debt, or geopolitical tension.” Right now, both growth optimism and fear are elevated. Investors are hedging their bets, buying both assets to cover all bases. While it’s not the norm, this kind of dual rally isn’t entirely surprising, said financial advisor Harley Kaplan. “There’s a lot of global risk,” he said. “Gold offers protection. Stocks show confidence in the future.” A Look at the Gold-to-S&P 500 Ratio One key metric to watch is the gold-to-S&P 500 ratio — essentially, how many ounces of gold it takes to buy the index. The ratio has climbed from around 1.5 in April to roughly 1.76, which Koos describes as “elevated but not extreme.” When the ratio rises, it means stocks are outperforming. When it falls, investors may be shifting to safety. Right now, it suggests a cautious balance — confidence in stocks, but not at the expense of gold. Could we see both assets break records again? It’s possible, Koos says — but it would require a unique set of circumstances: falling real interest rates, central bank gold buying, ongoing AI-driven growth, and just enough uncertainty to keep investors nervous. “It’s a fragile balance,” he said. “Like spinning two plates at once — it can be done, but it takes constant movement and the right conditions to keep everything in the air.” John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

AI Resurgence and $1 Trillion in Buybacks Set to Propel Stock Market Higher The S&P 500 closed just above the 6,000 mark last week, inching closer to record highs. A further 2.4% gain would push the index into new territory, continuing a rally that has seen the benchmark rise over 20% since mid-April. That surge is forcing a shift in sentiment among Wall Street analysts. Forecasts that were cut earlier in the year are now being revised upward. Citigroup, for instance, has raised its year-end 2025 S&P 500 target to 6,300, up from 5,800. While still below its original projection of 6,500, the new target reflects reduced concern over trade tensions and increased optimism about the economic outlook. Citi notes that investors appear more willing to overlook short-term policy noise, especially as GDP expectations and labor market indicators have improved in recent weeks. The bank also raised its full-year S&P 500 earnings forecast to $261 per share from $255, citing improved sentiment and corporate resilience in a complex policy environment. Valuations remain elevated, but Citi believes they are justified. The firm expects the market’s price-to-earnings ratio to hold near 21, supported by structural changes—particularly technological advancements like AI—that are reducing earnings sensitivity to economic cycles. Two key drivers are expected to underpin the market’s strength: Citi acknowledges that ongoing political uncertainty—especially as the 2024 U.S. election approaches—adds noise to the market. However, they argue that investors, analysts, and companies are becoming more adept at managing through it. “Fundamentals are proving more stable than policy headlines,” the team writes. As the second half of 2025 approaches, Citi sees further gains, emphasizing a strategy of buying pullbacks rather than chasing rallies. Their mid-2026 S&P 500 target remains at 6,500. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com

JPMorgan: Big Investors Underexposed to Mega Tech as Market Leadership Narrows Again Market leadership is tightening once more, and according to JPMorgan strategists, many large investors are underweight the very sector driving recent gains: mega-cap tech. Despite a high-profile clash between the U.S. President and the world’s wealthiest individual, markets barely flinched. Tesla may have lost nearly $200 billion in market value, but the S&P 500 dipped just 0.5% and remains only 3.3% below its February peak. Since hitting a low in April, the index has rebounded nearly 20%, as trade war concerns have faded and investor sentiment has strengthened. In a note published Thursday, JPMorgan’s team led by Dubravko Lakos-Bujas said the “path of least resistance is to new highs.” The rally, they argue, has been driven in part by a stronger-than-expected Q1 earnings season. U.S. companies not only posted solid 12% earnings growth before “Liberation Day,” but also delivered upbeat guidance, even as tariff pressure hovered around 20%. Investor enthusiasm has also been fueled by the ongoing AI boom, with no slowdown in capital investment from major tech players. But JPMorgan warns that the biggest threat to this bullish setup is a potential economic slowdown later this year. The bank highlights several risks: companies front-loading activity ahead of tariffs, delayed effects of recent policy changes (such as on immigration and regulation), and a disconnect between soft and hard economic data. JPMorgan’s business cycle indicator — which tends to lead corporate earnings by 2–3 quarters — has been flashing caution for the past three months. A slowdown could prove problematic given how richly valued equities have become in recent weeks. Still, a weaker economy might prompt the Federal Reserve to cut rates sooner, potentially allowing markets to look past the softness. This could create a “Goldilocks” scenario where lagging areas like small caps and cyclicals bounce back, at least temporarily. In the near term, JPMorgan sees a “dual pain trade” helping to fuel the current rally: With global markets still lacking an abundance of high-quality assets, JPMorgan questions whether stretched valuations and concentrated positioning in U.S. giants will matter much once macro uncertainty subsides. Bottom line: many investors may find themselves poorly positioned as U.S. mega-cap tech reasserts its dominance — and that could keep pushing stocks higher. John PaulJohn Paul is the founder of DayTradeToWin, a trading education and software company established in 2008, supporting traders worldwide. His expertise focuses on price action-based futures trading strategies and structured market analysis. DayTradeToWin delivers trading education, indicators, and software tools designed to help traders apply disciplined, rule-based decision-making across global futures markets. He is the creator of multiple trading methodologies, including the Sonic System, Atlas Line, and Trade Scalper, which help traders identify structured opportunities in markets such as the E-mini S&P 500 (ES), Nasdaq (NQ), crude oil (CL), and gold (GC). Official website: https://daytradetowin.com daytradetowin.com