Warsh’s Welcome Gift: 3.8% Inflation And A Cancelled Cut

Stock Market Edge

Software Showed Up. The Chips Sent Apologies. A record built on the handful of names that guided well.

1. Premarket snapshot: S&P futures idled near 7,576 by 09:25 ET, declining to improve on Thursday’s 7,563.63 record in case it meant something. Dow futures held near 50,724, Russell 2000 futures near 2,934, and Nasdaq-100 futures slipped about 0.2%. It was the eighth winning stretch in nine weeks. The VIX at 15.74 suggested a market entirely at peace with a peace that isn’t signed.
2. Sector rotation: AI software led, and semiconductors, the usual main characters, declined the role outright. Microsoft, Oracle and Palantir each added 3-4%. Energy lagged as oil sagged on the Hormuz memo. Breadth stayed roughly three names wide and seemed rather proud of it.
3. Earnings or guidance: Snowflake rose 36.5%, its best session on record, for the crime of guiding higher. Salesforce posted respectable numbers and fell 2%, because respectable is now an insult. The market paid handsomely for promises and fined competence on sight.
4. Cross-asset nuance: Bonds firmed early, then the 3.8% PCE print reminded everyone the rate path points stubbornly up. The dollar held its ground. Gold edged to $4,547. The cross-asset tape muttered caution all afternoon while the equity tape ordered another round.

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📊 There’s a level on SPX I’m watching closely this morning. My full analysis briefing has it – plus what happens if we hold it, and what happens if we don’t. [Read it here →]

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Crypto Market Edge

Bitcoin Threw Itself A Going-Away Party The institutional bid left, and took the floor with it.

1. Price snapshot: BTC traded near $73,600, up a token 1% on the day and down a less token 11% on the year, parked beneath every moving average that matters. ETH loitered near $2,090, SOL near $81.37. Leadership was not available for comment.
2. Flows & positioning: Spot Bitcoin ETFs shed $223M Thursday, the biggest one-day outflow in three weeks and the finale of a six-day, $1.55B walkout led by BlackRock’s IBIT. April alone pulled in $2.44B; that mood has comprehensively reversed, with the year’s net inflows now shrivelled to about $536M. Ether ETFs bled for a tenth straight day.
3. Leadership & rotation: There wasn’t any. Ether traded as Bitcoin with extra steps, alts followed obediently, and Fear and Greed read 25, which is Extreme Fear with the volume turned up. Liquidity thinned into month-end.
4. Catalysts & roadmap: The catalyst was macro all along. Hot PCE lifted yields and the dollar, the precise recipe for draining anything that doesn’t pay you to hold it. A hawkish Warsh keeps the screws turning into the mid-June meeting. The $62,872 close low is the floor bulls now nervously guard.

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TL;DR – The Bottom Line

• Wall Street closed at records celebrating a 60-day Hormuz truce Trump hasn’t signed, struck hours after fresh missiles. Peace got priced. Peace did not get agreed.
• SPX held 7,563 into month-end on a catalyst with a blank signature line. The only honest number on the page, 3.8% inflation, was politely ignored.
• Bitcoin slid under $74,000 as ETFs bled $223M, the worst day in three weeks. The institutional bid that built the floor quietly left the building.
• April PCE hit 3.8%, highest since May 2023, and the Fed’s promised cut evaporated. Warsh’s welcome gift is a possible hike at the mid-June meeting.
• Friday brings month-end and three crowded bets: peace, disinflation, a dovish Fed. All three lean on one unsigned page. Pick which folds first.

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📌 Fun Fact

The 21-Mile Choke Point The waterway carrying the record higher is barely wider than a city. Roughly a fifth of the world’s seaborne oil passes through the Strait of Hormuz, a channel only about 21 miles across at its narrowest, with shipping lanes just two miles wide in each direction.