What a difference a few words can make… 

The FOMC minutes hit the tape today and, to no one's surprise, we’re treated to another rate hike. 

This time the Fed Reserve raised interest rates by another 25 basis points. 

Benchmark rates are now in a new range of 4.50% and 4.75%, the highest level since October 2007.

However, this latest rate marks a slowdown in tightening that started last month when rates were hiked by 50 basis points. 

That 50-point hike is still down from the 75-point hikes we saw from June to November. 

Now, back in today’s meeting, Fed officials have acknowledged that "inflation has eased somewhat but remains elevated." 

Powell continued, "we can now say for the first time that the disinflationary process has started."

Additionally, officials no longer brought up Russia’s war in Ukraine as contributing to upward pressure on inflation but maintained that the conflict continues to elevate global uncertainty.

These few words on inflation easing and the start of a disinflationary period were all it took to completely change the direction of the market.

We saw today kick off with a red open, stocks continued to coast for most of the day until the Fed meeting. 

Following, the major indices all shot up to post some serious gains.

When all was said and done, the Nasdaq closed up by 2%, the S&P marked a 1% gain, and the Dow was able to churn out a miniscule gain of 0.02%. 

Here’s how today’s close broke down across sectors: 

A Case for the Bulls

Fed meeting aside, the bulls have managed so far to hold the upper hand over the bears in this year’s market environment. 

On Monday, we witnessed a vicious pullback in many of the bottom-bouncing rallies that had thrived in January. This was a major test of the validity of bullish market sentiment. 

If sentiment was poor, it wouldn’t take much convincing for a red day to spark a bigger sell-off. 

However, that’s not what happened… 

Interestingly enough, the market recovered yesterday. Big tech, semiconductors, software, and tech growth all rallied right back into action despite the ugly start to the week. 

We also saw gold and other precious metals recover after a morning dip. 

And then with today’s action, the markets are solidly green on the week and on the year. 

Of course, we could see some more back and forth in the months ahead, but with all factors considered we’re off to a much better start this year when compared to 2022. 

As we continue to navigate these markets it remains important to keep an eye out for major themes as they develop. 

For now, buyers are out there and active… 

I’m seeing plenty of potential in sectors such as AI, nuclear energy, semiconductors, and biotechnology. 

A lot of these names were beaten up pretty badly in 2022 and have now been outperforming some of the best sectors of last year. 

As always, I’ll be sure to keep you in the loop with what I’m seeing while the market works to undo the damage done in 2022.