What's next for the market in Q3? 🔮

Good afternoon, Insiders!

Welcome to the second Market Insights Update of May! This note will cover critical macro updates in the United States and focus on trends in areas like electric vehicles, AI, precious metals, and solar.

Market Outlook

Inflation continues to be one of the dominant market factors this year, as the Federal Reserve and ECB are assessing whether they can cut interest rates later this year. Consumers seem on edge due to higher rates and inflation, as the Consumer Sentiment Index recently fell to a multi-month low.

The S&P 500 has continued to rally this year, although alternative narratives like gold and silver are beginning to take the front seat and outperform. However, companies like Nvidia have helped support the market due to new AI offerings and favorable earnings results. Nvidia’s recent outperformance last quarter could help bolster sentiment for the S&P 500 in the short term.

It appears that inflation risks have not been resolved, and potential geopolitical risks could add fuel to the fire. In this stage, it likely makes sense to do selective shopping in the equity markets. This note will cover two industries that may be poised to take off due to new tariffs that may be imposed.

New Inflation Data

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