Fed Holds Firm | Immigration Slows Jobs | Banks Catch Bid

It felt steady into the bell. It was anything but broad.

After last week’s AI-driven pressure, the major indexes closed marginally higher. 

The S&P 500 added just 0.1%. The Nasdaq and Dow did the same. 

On the surface, it reads stable. Underneath, capital kept moving.

The 10-year held near 4.06%. The dollar firmed. Commodities softened. That mix matters. It signals restraint, not acceleration.

• Software extended its slide, with IGV down more than 2% and several former leaders hitting fresh yearly lows.
• Financials attracted steady bids as Citigroup and JPMorgan outperformed the tape.
• Thirty-seven S&P names printed new 52-week highs, largely outside high-growth tech.
• Fund managers reported their largest equity overweight since late 2024, pushing sentiment toward crowded territory.
• Dispersion widened as capital rotated rather than exited.

This is not a panic unwind. 

It is a leadership reshuffle.

The Narrowing

The market is pricing resilience with a higher hurdle rate. The illusion that liquidity alone can lift all multiples is fading.

Cash flow and operating durability are regaining sponsorship. When optimism stays high and breadth thins, risk concentrates in leadership.

I had to share this today.

A strange new “wonder material” just shattered two world records, and the company behind it is suddenly partnering with some of the biggest names in tech.

We’re talking Samsung, LG, Lenovo, Dell, Xiaomi… and Nvidia.

Nvidia is already racing to deploy this technology inside its new AI super-factories.

Why the urgency?

Because this breakthrough could become critical to the next phase of AI. And if any tiny stock has the potential to repeat Nvidia’s 35,600% climb, this might be it.

See the full story here.

The market is leaning toward relief.

The Fed is leaning toward restraint.

Governor Michael Barr made it clear that patience now carries more weight than momentum.

Rates are likely to stay where they are while officials study the data. Inflation is not collapsing. It is drifting. That is not enough.

Goods prices must cool in a durable way. Services cannot reaccelerate. The labor market must remain steady, not just stable on paper. The message is simple: progress must be sustained, not episodic.

Policy Path

• Barr signals rates likely on hold as inflation risks persist.
• Officials want sustained goods disinflation before cutting again.
• Services inflation remains elevated near 3%.
• The labor market is balanced but exposed to negative shocks.
• AI investment continues, largely indifferent to borrowing costs.

Markets were hoping for a clean glide path back to easing. What they are getting is a checkpoint system.

The Gate

This is a market rediscovering that easing is conditional. The Fed is signaling that inflation must improve sustainably, not episodically.

That removes the assumption of automatic rate relief. Duration must now be earned through cash generation.

The headline says jobs are cooling.
The undercurrent says labor supply is shrinking.

New research from the San Francisco Fed ties the slowdown in unauthorized immigration directly to weaker job growth. 

The sectors hit first are not random. Construction and manufacturing. That matters for growth. It also matters for housing.

The market often treats softer payrolls as a clean disinflation signal. The mechanics here are less generous.

Labor Flow

• Unauthorized worker inflows surged after 2021, then slowed sharply in 2024.
• Local job growth rose and fell in step with those flows.
• Construction payrolls show the clearest deceleration.
• Manufacturing and local services follow the same pattern.
• Housing supply growth now faces added labor constraints.

The supply side is tightening just as demand cools. That complicates the narrative.

The Supply Squeeze

This is not clean disinflation. Labor supply is shrinking where capacity is built.

That softens payrolls without expanding output. Housing does not get cheaper if supply slows too.

This wasn’t a random crypto crash.

It was a leverage flush.

As Bitcoin broke key levels, forced liquidations wiped out overextended traders. Ethereum followed. Altcoins fell harder. Sentiment flipped to fear, not because crypto failed, but because excess got cleared.

These moments reset markets.

Historically, when volatility spikes and weak hands exit, stronger capital starts positioning.

One altcoin stands out right now, real utility, active users, managing billions… yet still priced like last year.

See the full setup here.

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Nine days erased $450 billion. The selling did not start with demand. 

It started with capex.

Amazon plans to spend $200 billion this year, most of it on AI infrastructure. 

It sits nearly 60% above last year and far above forecasts. The reaction was swift. 

Investors did not debate the opportunity. They debated the timing of returns.

This is not a growth scare. It is a capital discipline test.

Capex Cycle

• Amazon guides $200 billion in spending, mostly AI related.
• The stock falls 18% in nine sessions as free cash flow fears rise.
• Alphabet and Microsoft trade lower as investors widen the lens.
• Total hyperscaler capex could approach $700 billion this year.
• Management defends spending with long-term ROIC targets.

The market is recalibrating the hurdle rate. Build plans now require math.

The Payback Clock

This is not an AI unwind. It is a repricing of payback timelines.

When capex outruns visible monetization, multiples compress. Ambition no longer substitutes for return math.

Twelve days. Another release.

Anthropic just pushed out Claude Sonnet 4.6, days after launching Opus 4.6.

The cadence is not cosmetic. It is structural. Performance once reserved for top-tier models now moves down the stack. Coding, design, workflow tasks all improve at a pace that compresses product cycles.

The market does not wait for adoption data. It prices the threat early.

Release Cycle

• Anthropic ships two major models in under two weeks.
• Sonnet 4.6 becomes default across free and paid tiers.
• Performance gaps narrow between premium and mid-tier models.
• Software ETFs slide as disruption risk gets repriced.
• Capital floods model builders while workflow names trade as a block.

Feature velocity is no longer a moat. It is table stakes.

The Hardening Edge

Feature velocity used to command premium multiples. Model cycles are now compressing that advantage. 

Markets are pricing disruption before revenue shows it. The edge shifts to distribution, data control, and integration depth.

When a stock falls 70%, patience thins.

Fiserv learned that the hard way.

After a sharp earnings reset and slowing growth in its merchant unit, nearly $30 billion in value disappeared in a single session last year. 

The macro backdrop did not break. Execution did. Now Jana Partners has built a stake and begun engaging with management.

This is not a breakup thesis. It is a discipline thesis.

Boardroom Shift

• Jana accumulates shares following a prolonged drawdown.
• Merchant-solutions growth slows under competitive pressure.
• Prior profit forecasts were cut to reset expectations.
• New leadership installs a CFO and refreshes the board.
• A review of noncore assets moves into discussion.

Activism rarely arrives during easy rallies. It appears when valuation support erodes and capital demands proof.

The Capital Test

Broad multiple expansion no longer rescues weak execution. When valuation cushion disappears, boards feel it. Activism accelerates capital discipline and asset reviews. Fundamentals matter again.

If you have any money in the stock market, you may want to pay attention.

New research points to a massive market-moving event that could send hundreds of popular stocks into a sudden free fall.

Holding the wrong stocks when this hits could erase years of gains.

That’s why analysts have now identified a list of stocks investors may want to avoid as this event unfolds.

If you want to see what’s coming, and which stocks could be most at risk.

Click here to get the full details before it’s too late.

Across macro, labor, tech, and payments, the same pattern is forming. The market wants glide paths. Policymakers and capital providers are installing gates.

Rates are conditional. Labor supply is thinner. Capex must justify itself. Software moats expire faster. Boards are being pushed to act.

This is not a collapse in demand. It is a compression in tolerance. Duration, feature velocity, and vague transformation stories no longer earn automatic multiples.

Capital is narrowing its rally. Cash conversion, integration depth, and execution discipline now sit at the center of valuation math.

The system remains funded.

But the burden of proof has shifted.