Red everywhere. Everything tumbled on Wednesday as the Federal Reserve gave with one hand and took away with the other—cutting rates by 25 basis points but hinting that the scissors might stay in the drawer for a while.

⚡ Closing Bell:

• Dow Jones: ⬇️ -2.6% to 42,326.9 — its worst losing streak (10 days) since 1974.

• Nasdaq Composite: ⬇️ -3.6% to 19,392.7

• S&P 500: ⬇️ -3% to 5,872.2

• Russell 2000: ⬇️ nosedived -4.4%—its biggest loss this year.

Even the usually reliable consumer discretionary stocks crumbled, diving a hefty
⬇️ 4.7%.

Translation? The Fed’s walking a tightrope: inflation’s sticky, but they’re hesitant to overdo it. Case in point—rate projections for future years just got a noticeable bump:

• 2025: 3.9% (from 3.4%)

• 2026: 3.4% (from 2.9%)

• 2027: 3.1% (from 2.9%)

Bond Yields Go Vertical
As investors digested the Fed’s cautious tone, Treasury yields shot up:

• 10-Year Yield: ⬆️ +12.9 bps to 4.51%

• 2-Year Yield: ⬆️ +11.6 bps to 4.35%

❗ VIX (aka the “fear gauge”) couldn’t sit still, spiking 11.75 points to hit a four-month high of 27.62.

❗ Some thoughts: The Fed’s cautious optimism walks a fine line, with inflation stuck at 2.8% YoY and growing unease about potential inflationary policies from the incoming administration.
The market? Struggling between asking, “Is this the bottom?” and bracing for turbulence ahead in 2025.

#TRUTH:
❗❗❗ “The greatest adventure is what lies ahead.” ~ Jack London

Fewer cuts = stronger dollar = tougher times for gold bulls.

The Federal Reserve’s decision to cut rates by 25 basis points wasn’t the issue—markets had priced that in. What sent shockwaves through the precious metals world was Powell’s hawkish commentary, signaling a slower pace of cuts in 2025. Dreams of four rate cuts were dashed, replaced by a reality of just two, leaving gold bulls wondering if their shine has dulled for good.

Lower interest rates usually boost gold’s appeal, but the Fed’s commitment to keeping rates elevated for longer threw a wrench into that narrative. Futures mirrored the uncertainty, sliding 1.2% to $2,620.79 an ounce. Powell didn’t mince words: persistent inflation remains a major concern, and any further cuts depend on clear progress in taming it. Throw in potential inflationary policies from the incoming Trump administration, and gold’s road ahead looks as bumpy as ever.

Adding insult to injury, the U.S. dollar surged to a two-year high, piling on more pressure. A stronger dollar makes gold more expensive for international buyers, reducing demand just when the metal could use a boost. It wasn’t just gold feeling the heat—silver tumbled 2.7% to $29.92 an ounce, proving that even the shiniest assets can struggle under hawkish skies.

Meanwhile, platinum managed a small win, inching up 0.7% to $928.90 an ounce, but copper wasn’t so lucky. The red metal dipped 1.4% to $8,921.50 a ton as the dollar’s strength overshadowed optimism about potential fiscal spending in China, the world’s largest copper consumer.

Bitcoin:

Cryptocurrency stocks got hammered too, after Powell reminded everyone the Fed isn’t in the Bitcoin-buying business:

• MicroStrategy (MSTR): ⬇️ -9.5%

• MARA Holdings (MARA): ⬇️ -12.2%

• Riot Platforms (RIOT): ⬇️ -14.5%

Sweet Tooth Dilemma:

Cocoa futures crossed $12,000 per metric ton this morning, nearly triple what they cost at the start of the year. Your favorite sweet indulgence? Now a not-so-sweet reminder of inflation.

The culprit? Drought-stricken harvests in West Africa, which churns out 75% of the world’s cocoa supply. While chocolate companies have tried to cushion the blow, brands like Nestlé (-2.62%), Mondelez (-2.20%), and Lindt have already raised prices this year. Analysts predict another ~10% price hike in 2024, leaving chocolate lovers with a bitter aftertaste.

Cocoa makes up 10-20% of production costs, but with prices soaring, it’s shaking up the industry. Some confectioners are rethinking recipes, replacing cocoa with artificial flavors to keep prices in check.

The pressure is also fueling industry shakeups. Last week, Hershey turned down a $40 billion buyout offer from Mondelez, potentially signaling a trend toward consolidation as companies look to offset these sticky cocoa costs.

At the end of the day, it’s consumers who will bear the brunt. Whether it’s paying more at checkout or biting into a less cocoa-rich bar, your sweet tooth is getting pricier to satisfy.

On the road again:

Amid a haze of EV uncertainty, ChargePoint (CHPT) and GM are delivering a rare spark of optimism. The duo plans to roll out 500 ultra-fast “Omni Port” chargers starting in 2025, designed to work with both Tesla (TSLA) and other EV brands. Think of it as a charging truce in the war of CCS vs. NACS ports.

The EV world has been stuck in neutral lately, with major players like Ford (-2.91%) and GM (-2.29%) dialing back their electric ambitions as consumers hesitate to make the leap. Why? Many are waiting for charging infrastructure to catch up—and for clarity on what incentives might survive the incoming Trump administration.

Enter the “Omni Port,” a universal charger that could help bridge the infrastructure gap and reignite interest in EVs. ChargePoint’s stock ticked up 0.43% on the news, a rare bright spot in an industry currently weighed down by uncertainty.

🧩 Movers:

• Spotlight ✅ / At the Bottom ❌

  • ✅ Jabil (JBL): ⬆️ +7.3%, a rare bright spot after strong quarterly results and an upbeat outlook.

  • ❌ Tesla (TSLA): ⬇️ -8.3%, posting one of its steepest losses this year.

  • ❌ Broadcom (AVGO): ⬇️ -6.9%, hit by broader tech weakness.

  • ❌ GameStop (GME): ⬇️ -8.5%, continuing its rollercoaster ride.

  • ❌ Quantum Computing (QUBT): ⬆️ +52.6%, defying the Fed-driven carnage with an eye-popping rally.

  • ❌ Toro (TTC): ⬇️ was clipped, shedding 4.5% after weak sales and a lukewarm 2025 forecast.

Commodities Check: ✔️

The commodity and corporate corners weren’t spared:

• Gold: ⬇️ -2.2% to $2,603/oz. Safe haven? More like safe-ish.

• Silver: ⬇️ -3.6% to $29.80/oz.

• WTI Crude: Stayed steady at $70.08 per barrel, holding its ground despite market volatility.
  

The Dollar:

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The stinger

Disclaimer

This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills.