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

For context, ever since the April sell-off following the tariffs announcement (aka Liberation Day), stocks have fully recovered and more with the S&P putting in 29 new all-time highs and the Nasdaq 30.

Optimism after last week's FOMC Announcement when the Fed cut rates by 25 basis points, and forecast two more cuts to follow by year's end, not to mention upping their growth outlook for both this year and next, stocks have surged higher.

Even though the Fed has shifted more of its focus on the labor market vs. inflation, we will get another look at inflation on Friday, 9/26, with the Personal Consumption Expenditures (PCE) index, which is the Fed's preferred inflation gauge. But short of a significant increase, the Fed seems poised on cutting again.

Reports yesterday that NVIDIA will invest up to $100 billion in OpenAI, to build data centers that use NVIDIA chips, further buoyed stocks. That comes on the heels of NVIDIA's $5 billion partnership with Intel that was announced last week (which now sounds like peanuts by comparison).

And that comes on the heels of Oracle's soaring sales outlook 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), which further confirmed the AI trade is alive and well.

In other news, Friday's announcement by the White House of a hefty new fee of $100,000 for new H-1B work visa applications weighed on stocks in the morning. It's a one-time fee and does not apply to renewals, or preclude current holders of H-1B visas that may be out of the country from re-entering the U.S. But many in the tech industry, and other industries, have complained that it will hurt U.S. competitiveness.

The market was able to look past that yesterday. But I suspect this will not be the last we hear of this.

On the economic report docket today, we'll get the PMI Composite Flash report and the Richmond Fed Manufacturing Index.

We'll also hear from Fed policymakers Michelle Bowman and Raphael Bostic. But the policymaker people will be listening to the most is Fed Chair Jerome Powell, as he speaks at the Greater Providence Chamber of Commerce 2025 Economic Outlook in Warwick, RI. He's not expected to break any new ground. Nonetheless, you can be sure his comments will be scrutinized.

In the meantime, stocks are sitting at or near record highs or YTD highs.

September has a reputation for being a tough month for stocks, especially the back half. But since 1928, the S&P 500 has only been down 55% of the time. So far, so good.

October has a challenging reputation as well, as it's considered the most volatile month for stocks. Although, volatility notwithstanding, it usually ends in the plus column.

But gladly, Q4 is considered the best quarter for stocks. And I'm fully expecting it to play out that way again this year.

See you tomorrow,