Hedgie's Market Edge - July 28, 2025

🦔 What a week! Markets just delivered one of those rare combinations where almost everything went right. The Fed held rates as expected, mega-cap tech earnings crushed expectations, and we got our first glimpse at Q2 GDP growth that wasn't terrible. Yet as we head into the final trading days before that August 1 tariff deadline, I'm sensing a shift in market psychology that's worth unpacking.

The S&P 500 closed Friday at 6,421, up 1.1% for the week and now sporting a 9.2% year-to-date gain. More importantly, we're sitting just 2% below all-time highs with breadth that's actually improved over the past month. But here's what caught my attention: the market barely blinked at some pretty significant news this week.

THREE PILLARS THAT HELD UP THE RALLY

1. The Fed Stays Patient, Markets Stay Happy

Jerome Powell delivered exactly what markets wanted to hear. The FOMC held rates at 5.25-5.50% as widely expected, but the real story was in Powell's press conference language. He didn't rule out September cuts if economic data cooperates, essentially giving markets permission to keep pricing in easing.

The key phrase everyone's parsing: "We're getting closer to the point where it will be appropriate to reduce policy restrictiveness." Translation: September is live if tariff clarity emerges and inflation cooperates.