Stocks closed lower yesterday, but well off their intraday lows.

Some of the headlines pointed to tariff uncertainty after last week's late Friday ruling by the U.S. Court of Appeals that said many of the President's reciprocal tariffs exceeded his authority. But they stopped short of an injunction that would've ended the tariffs, instead sending the matter back to the lower court to determine what type of relief is appropriate.

In the meantime, the President has said he will ask the Supreme Court for an expedited ruling on the matter.

But the impact, even if the Appeals ruling was upheld, might not stop the tariffs after all (or affect a smaller portion of them) as the ruling cited the use of the International Emergency Economic Powers Act. And there's a belief that the Administration would come up with a different way to enact those tariffs.

Moreover, the industry tariffs placed on steel and aluminum, for example, are not affected as they were levied under a different act, which was not contested.

Nothing is expected to be resolved until mid-October. That goes for the Supreme Court's actions and the lower court's considerations.

After another fantastic earnings season, which saw the big three indexes make new all-time highs, the market was ripe for a bit of profit taking. And the tariff headlines created the perfect excuse.

In other news, it was reported late yesterday afternoon that Google would avoid the most severe penalties for being found guilty in last year's antitrust case ruling related to their monopoly in search and advertising. The DOJ had recommended that they divest their Chrome browser, and their Android operating system. Instead, it will be barred from executing exclusive contracts to use their browser, but does not restrict them from making payments to become the default browser.

Alphabet was up 8% in after-hours trade following the news. And the S&P futures were up 0.30%.

As you know, I'm expecting the S&P to gain another 20% this year.

The last time we saw back-to-back gains of 20% or more in the S&P was back in 1995 and 1996. And it followed with 3 more years of 20% gains. In ?95 the market was up 34.1%. In ?96 it was up 20.3%. In ?97 it was up 31.0%. In ?98 it was up 26.7%. And in ?99 was up 19.5%. That was 5 long, glorious years of gains (a 220% increase) led by the internet and dot com boom.

I see the same thing happening this time. In 2023, the S&P was up 24.2%. In 2024 it was up 23.3%. And we can thank the modern-day tech boom for that, driven by AI. The unprecedented spending and innovation is expected to last for years to come. And I'm expecting another 3 more years of 20% plus gains before all is said and done, if not more.

With the S&P 'only' up 9.08%, I see a lot more upside over the next 4 months.

If we do happen to see a pullback in the interim, I would imagine that will be short-lived, as I expect any dips to be aggressively bought for the aforementioned reasons.

And you can add in the long-awaited interest rate cuts that are likely to be seen in mid-September when the Fed announces their decision on interest rates on September 17^th.

There are plenty of positive things surrounding the market right now.

So, make sure you're taking full advantage of it.

See you tomorrow,