Good Morning Investors,
Markets are attempting to stabilize after Monday’s heavy selloff, with traders clinging to signs that peak fear may have passed. The S&P 500 holding 5100 is technically constructive, and voices of support for Fed independence are starting to emerge following President Trump’s latest attacks on Jerome Powell. Add to that some tentative optimism about a U.S.-India trade deal and you've got the ingredients for at least a temporary rebound.
While short-term volatility will persist, The AI rally is not over, and American exceptionalism is not dead. I still believe the largest and most innovative companies in the world remain U.S. based, and this pullback represents an opportunity rather than a reason to panic. The second half of 2025 could deliver renewed outperformance for tech, particularly in software names benefitting from broader AI adoption beyond just the hyperscalers.
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BEFORE THE BELL
US stock futures moved higher on Tuesday following a bruising day on Wall Street, marked by renewed criticism of Federal Reserve Chair Jerome Powell by President Trump.
Futures attached to the Dow Jones Industrial Average (YM=F) climbed 0.8%. Futures for the benchmark S&P 500 (ES=F) ascended 0.7%, while futures for the tech-heavy Nasdaq Composite (NQ=F) advanced 0.8%.
Trump’s recent remarks hit the dollar, which marked fresh lows against the yen and hovered near multi-year lows versus the euro and franc. Meanwhile, European shares slipped, dragged lower by Novo Nordisk, and Japan’s Nikkei fell on tariff concerns. Gold broke through $3,500 on safe-haven demand, and oil inched higher on short-covering.
STOCKS TO WATCH
3M slashed its 2025 profit forecast due to tariff impacts.
GE Aerospace beat on Q1 earnings and reiterated guidance.
Tesla reports after the bell, with investors focused on the affordable EV rollout and Musk’s return to operations.
Halliburton and Kimberly-Clark both highlighted tariff pressure in their outlooks.
Verizon missed on wireless subs but reaffirmed full-year guidance.
BITCOIN WATCH
Bitcoin surged above $88,000 and is increasingly diverging from equities, behaving more like a risk-off hedge. Since Trump’s “Liberation Day” tariffs, BTC has outperformed the Nasdaq and S&P significantly. While headlines have fixated on a recent “death cross” — where the 50-day moving average dips below the 200-day — historical data shows this signal often triggers short-term weakness but strong long-term upside. In fact, the average 1-year return following a Bitcoin death cross is +88.9%, with standout rebounds including +715% in 2020 and +167% in 2023.
Bitcoin has now rebounded from its recent lows and is heading back toward critical levels — $90K and $95K. If those break, the next leg of the bull run could begin. What’s notable is BTC’s resilience during recent market volatility. While tech and equities corrected, Bitcoin held its ground and found new demand. That sort of decoupling, especially in a macro environment dominated by inflation fears, trade wars, and weakening trust in the Fed’s independence, is exactly the type of structural strength long-term bulls have been waiting for.
For those concerned about the “death cross,” history suggests the average return after 30 days is -3.3%, but at the 90-day mark, it jumps to +26.2%, and after one year, the average gain is nearly +89%. Roughly half of previous death cross periods resolved in under 90 days. In short: Death Cross ≠ Death Sentence.
BIG TECH EARNINGS AHEAD
Tech earnings kick off this week with Alphabet and Tesla. Shares of Alphabet are down nearly 29% from their 52-week high, while Tesla is down about 54%. Investor sentiment is low and expectations are even lower — a potential recipe for upside surprise. A fair amount of bad news is likely already priced into Tesla’s stock, including disappointing Q1 deliveries and a significant downward revision in 2025 earnings estimates.
Tesla’s Tuesday report lands against a murky backdrop. The stock is down 40% year-to-date, following its worst quarter since 2022. Musk’s involvement in the Trump administration, paired with Tesla’s supply chain reliance on China and Mexico, has exposed the company to tariff risk. CFO Vaibhav Taneja has already warned that tariffs would impact profitability, and analysts expect minimal revenue growth in Q1. Piper Sandler recently cut its price target, citing gross margins near multi-year lows.
Investors will want to know whether Tesla’s long-awaited affordable EV and robotaxi programs remain on schedule. The company’s Q1 deliveries were down 13% year-over-year, prompting further questions about demand and price cuts. Tesla has sought exemptions from the U.S. trade representative for several Chinese-made components. Musk’s reported frustration with Trump’s top trade advisors only adds more intrigue to the upcoming earnings call.
Alphabet is also facing mounting questions. While it continues to push deep into AI and cloud infrastructure, the online ad market remains at risk. Retail advertisers like Temu and Shein are pulling back spend, which could weigh on Google’s ad business. Piper Sandler warned of an 18% hit to 2025 global ad forecasts. Meanwhile, Alphabet’s $75B capex plan — largely targeted at AI data centres — could face revision if tariff pressures hit imported hardware. Cloud customers are reportedly pulling back spend, and Alphabet’s Pixel hardware supply chain remains exposed.
ANALYSTS' RECOMMENDATION
• Amazon: Jefferies cuts target price to $240 from $250. They said that the company is facing revenue and margin headwinds from tariffs, particularly on Chinese imports.
• AMD: Bernstein cuts target price to $95 from $125, due to AI headwinds amid China export restrictions.
• Comerica: JP Morgan cuts rating to underweight from neutral and target price to $52 from $64, saying the company is expensive against a challenging growth outlook for 2025.
• Coreweave: Goldman Sachs initiates coverage with a neutral rating and a target price of $54, noting that the company's relatively undemanding valuation.
• Intel: Bernstein cuts target price to $21 from $25, revising down the company's growth and EPS forecast for 2025 due to tariff dynamics.
STRATEGIC OUTLOOK
I continue to believe this is a bottoming process, not a breakdown. While volatility may remain high, technical levels are holding, and sentiment indicators like the VIX have begun easing. Tech earnings this week — especially from Tesla and Alphabet — will tell us how much bad news is already priced in. If results come in better than feared, we could see sharp reversals higher.
Importantly, don’t mistake a single higher low for a new uptrend — bottom formation is messy. There will be sharp rallies and scary pullbacks. But fundamentals — particularly in AI, software, and U.S. equities — remain more solid than headlines suggest.
The AI trade will reassert itself. I expect a broader rally in enterprise software and semis once earnings show that real demand remains intact. The path forward will be choppy, but the opportunity is forming now.
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Please feel free to reach out to me on LinkedIn or by email if you would like help navigating this market environment or have any planning-related questions.
Dan Sheehan
This newsletter is for informational purposes only and should not be considered as investment advice. Please consult with your financial advisor about your specific situation.