Daily Market Recap: CPI Miss Fuels Rate Cut Bets, Oil Surges on Middle East Tension, Stocks Slide

Tuesday brought macro-driven volatility as CPI came in soft, but markets sold off. Trade fears and spiking oil added pressure, while bond yields dropped, boosting rate cut odds. Hedge funds took a hit as crowded trades unwound, and both crypto and the dollar slid. A messy day defined by mixed signals and sharp reversals.

What a mess of a session. The S&P 500 took a hit, Nasdaq followed, and the Dow somehow held flat — but don’t let that fool you. Beneath the surface? Volatility, uncertainty, and macro fireworks all around.

Let’s break it down:

🔻 Market Recap: Red Across the Board (Mostly)

• S&P 500 and Nasdaq closed lower, weighed down by renewed trade war fears and post-CPI confusion.
• The Dow managed to claw back to nearly flat after early losses, but it was still a weak tape overall.

📊 Daily ETF Performance:

• QQQ: Fell about −0.33%, closing around $532.41
• SPY: Declined roughly −0.28%, ending near $601.36
• IWM: Dropped about −0.41%, settling at $213.63
• XLF: Lost approximately −0.14%, closing around $51.00

Trade War Drama Reloaded

• Treasury Secretary Bessent testified today that it’s “highly likely” the U.S. will extend the trade deadline for countries negotiating in good faith — but not for those who aren’t. • The problem? Markets hate uncertainty. His comments added fuel to an already shaky fire. • All this as Bloomberg’s global trade policy uncertainty index just hit its lowest level since January — talk about a whiplash moment.

🛢️ Oil Spikes Again

• Crude oil ripped higher, driven by: • A larger-than-expected inventory drawdown • And renewed tensions in Iraq • On top of that, US-Iran nuclear talks might collapse, adding even more heat. • WTI crude has now wiped out all its losses from earlier in the quarter.

Gold also got a lift — classic flight-to-safety move on Middle East headlines.

🧠 CPI, Bonds, and the Rate Cut Watch

• The CPI print this morning came in softer than expected, but you wouldn’t know it from the initial reaction. • Stocks sold off anyway. Classic market overreaction. • Bond traders weren’t fooled — aggressive bidding across the curve with big demand for shorter duration. • 2-year yield dropped -8bps • 30-year yield down -3bps • 2Y back under 4.00% • Rate cut odds are rising again — markets now pricing in 25–50 bps of cuts in 2025. • After that CPI? The US macro inflation surprise index is now at its lowest since August 2020.

You know what I’m thinking… Are we inching closer to my July rate cut call? 📉👀

📉 Dollar Dips, Crypto Slips

• The U.S. dollar fell to its lowest level since July 2023 — a major move in the currency space. • Bitcoin sold off, as usual, when geopolitical tension rises. No surprise there. • Might be time for the algos to get a new playbook — the market’s evolving.

🧨 Hedge Funds Get Burned

• Hedge funds who piled into short positions on the most-shorted names got smacked today. • It’s the second big unwind of this playbook in the last 4 months (last time was March 7th). • These “VIP” trades are losing both sides — long bets fading, shorts ripping.

When both legs of the trade fail? That’s when you see real pain.

💼 What Did GAR Do Today?

Options:

• Initiated a new long position in HOOD calls, dated a few weeks out.
• Held through existing calls, no exits yet.
• SLV remains a hedge, offering balance in this volatility.
• TSLA 350c runners hit 150%

Futures:

• Took a -15 point loss on an ES long trade — not a major drawdown, and we move forward focused on setup quality and risk control.

📌 Final Thoughts

This was one of those days where macro ruled the session. Soft CPI. Middle East tension. Trade war doubts. Oil ripping. Bonds flying. Dollar tanking.

The tape is full of contradictions — bullish undercurrents in some places, total fear in others. The path to a rate cut is clearing, but not without noise. will it be in july like our call? (for a rate cut).

No need to panic — but don’t ignore the signals. 🎯 Position smart, stay patient and ready! — Carlos CEO GAR Capital

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