Stocks closed mostly higher yesterday with the S&P and Nasdaq both making new all-time highs, yet again.

Optimism after last week's better-than-expected inflation reports carried over into yesterday.

It's looking almost certain the Fed will cut interest rates when they conclude their 2-day FOMC meeting on Wednesday, 9/17.

While the cut is widely expected, there's still some speculation that they could cut as much as 50 basis points rather than 25. And the move would not be unprecedented. In fact, the Fed kicked off last year's rate-cutting cycle with a surprise 50 bps cut, and then followed it up with two more 25 bps cuts at subsequent meetings.

Although, the odds are still overwhelmingly for 25 bps.

Nonetheless, there's a growing belief that the Fed may cut rates 3 times this year rather than the 2 cuts they had previously forecasted. While it's unlikely they'll come out and say it, investors will be parsing every word that Fed Chair Jerome Powell says at his press conference that follows their announcement 30 minutes later at 2:30 PM EST.

In other news, it was reported that the U.S. and China have agreed to a framework deal that would give U.S.-based ownership of the social media app TikTok. Details were short. But President Trump and President Xi Jinping are expected to finalize the deal when they speak on Friday.

Not only should this end the saga over what happens with TikTok, but could also signal more cooperation between the two countries regarding ongoing trade talks.

Also lifting stocks was continued optimism concerning the AI trade. Last week's soaring sales outlook by Oracle for their AI offerings over the next 4 years ($18 billion in fiscal 2026, then growing to $32B in 2027, $73B in 2028, $114B in 2029, and $144B in 2030) sent their stock up by 36% the following day ? their best one-day advance since 1992. Analysts were quoted as being "blown away" and "in shock" at the forecast. And a Wells Fargo analyst called it a "momentous confirmation" of the AI trade.

People were in awe a couple of years ago when NVIDIA gave skyrocketing forecasts, and then delivered on them and more. Since 2023, Oracle is up 269%. For context, NVIDIA is up 1,117% since 2023.

Oracle's founder even became the richest man in the world after that move, albeit only briefly.

Elon Musk quickly regained that role and added to it again yesterday when TSLA gained 3.56% after reports Mr. Musk bought 2.57 million shares or roughly $1 billion worth of stock. That comes on the heels of Friday's gains of 7.36%. In fact, over just the last 3 trading days, TSLA is up nearly 18%.

On the economic report front today we'll get Retail Sales, Import and Export Prices, Industrial Production, Business Inventories, and the Housing Market Index.

A busy day indeed.

But it will be tomorrow's FOMC Announcement and Fed Chair Press Conference that will be the main events this week.

In the meantime, stocks are sitting near all-time highs or YTD highs. And it looks like there's a lot more upside to go.

See you tomorrow,