Investor Risk Appetite Broadens as Participation Spreads Beyond Tech

Investorideas.com (www.investorideas.com Newswire) a go-to platform for big investing ideas, including tech stocks issues market commentary from Ahmad Assiri Research Strategist at Pepperstone.

Markets delivered a strong session with enhanced risk appetite and gains extending across multiple asset classes. US macro data was the primary catalyst. Core CPI landed in line with expectations while weekly jobless claims spiked to 263k. Taken together, the data reinforced market conviction that the Fed is set to cut rates next week, with a 25bp move fully priced and a cumulative 75bp reduction now anticipated by year-end.

Equities maintained their upward trajectory with the SPX notching fresh record highs and the Nasdaq-100 breaking through the 24,000 level intraday. Importantly, the advance broadened well beyond the tech sector, materials, healthcare, consumer discretionary and financials all outperformed. This rotation underscores better depth of the rally and challenges the narrative that gains are overly dependent on the mega-cap names. Breadth of participation suggests institutional and retail demand are reinforcing each other, at least in the short term.

Pullbacks intraday remained shallow and were absorbed, forcing many of sidelined investors to chase the tape higher. History from the past two years suggests that buying into new highs has not been a misstep with dips proving opportunities to reestablish exposure. With rate cuts on the horizon, this pattern likely to persist in the near term.

In Treasuries, the moves were more nuanced. The 10-year yield slipped around to settle near 4.02%, briefly touching 4% for the first time since April. The curve flattened slightly, reflecting a mix of near-term easing expectations and longer-term fiscal sustainability concerns hold still. Earlier in the week, the Bureau of Labor Statistics’ benchmark revision stripped more than 911k jobs from April 2024 to March 2025, reinforcing the perception of a softer labor market and strengthening the case for the Fed cut. While a 50bp cut remains a tail risk, policymakers are unlikely to risk signaling panic through such a move, keeping consensus anchored at 25bp.

Looking ahead, the risk lies in buy the rumor, sell the fact. With markets heavily leaning into a 25bp cut, the Fed risks disappointing if it delivers the expected step with little to none hint at further accommodation. As such, equities could see profit-taking, bond yields may rebound modestly, gold could give back part of its stellar run and the dollar might find short-term support. The broader narrative remains, markets are optimistic on near-term monetary easing, yet mindful that the path to broader economic stability is uneven. US equities stand at record levels with expanding breadth, Treasuries are reasserting their signaling role, the dollar is drifting sideways with a softer bias and gold continues to act as the barometer of underlying market worries.

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