US equities had a tug-of-war week, with a hawkish Fed and frothy pockets meeting still-resilient AI-driven earnings optimism.
Stocks sold off mid-week as researchers flagged a more hawkish Fed tone, the trimmed statement's tilt toward inflation over employment, and triple-witching volatility. Several notes warned that higher belly-of-the-curve yields and tighter credit could pressure the recent one-way move higher.
Beneath the index, the dispersion was sharp. Bullish takes pointed to roughly 20% projected S&P 500 EPS growth, an AI capex cycle still in early innings, and an estimated half-point lift to productivity over 2–3 years. Constructive calls extended to semis tied to AI bottlenecks, quality small- and mid-caps, and consumer discretionary names.
Contrarian threads cautioned that semis now near 20% of the index are discounting 2028–29 earnings, flagged froth in quantum names and SpaceX's thin float, and saw end-of-quarter rebalancing plus buyback blackouts as near-term headwinds. Housing stocks drew bearish notes as builder confidence sank and price cuts deepened.