Dow climbs on dovish Fed bets, SoundHound soars

US equities advanced Friday, propelled by speculation of dovish monetary policy following President Trump's nominations of Stephen Miran and potential Fed Chair Christopher Waller, despite a muted reaction in 2-year yields. Meanwhile, gold futures in New York surged to an all-time high after the US announced tariffs on imported gold bars, disrupting global bullion trade and impacting Swiss suppliers. Key individual movers included Trade Desk (TTD) which plummeted over 38% on tariff-related advertising concerns, while SoundHound AI (SOUN) surged 25% following record second-quarter revenue.

Analysis

US equity markets are advancing on expectations of a more dovish Federal Reserve, following the nomination of Stephen Miran to the Board of Governors and the potential appointment of Christopher Waller as Fed Chair. Both are perceived as supportive of President Trump's rate-cut agenda, yet the market's conviction appears tempered, as evidenced by a muted reaction in the US 2-year yield. This skepticism echoes a previous instance in September where a 50-basis-point rate cut paradoxically led to higher yields, suggesting that policy credibility remains a key variable. Concurrent with monetary policy shifts, trade policy is creating significant market dislocations. A surprise US tariff on imported gold bars has caused New York Comex futures to surge to an all-time high of $3,534.10 per ounce, creating a significant premium over London spot prices and disrupting physical supply from key Swiss refineries. The real-world impact of tariff policy is starkly visible in individual equities, with The Trade Desk (TTD) plummeting over 38% after its CEO directly cited tariff uncertainty as a headwind for global advertiser spending. Conversely, SoundHound AI (SOUN) rallied 25% on the back of record Q2 results, with revenue growing 217% year-over-year, demonstrating that strong company-specific fundamentals can still drive significant outperformance despite macro headwinds.

Key Decisions for Investors

• Monitor the US 2-year yield closely as a gauge of the market's belief in the Fed's dovish pivot; a lack of a sustained fall in yields could signal that anticipated rate cuts are not being viewed as credible or effective in lowering borrowing costs.
• Investors with exposure to gold should be aware of the extreme dislocation between NY futures and London spot prices, as the tariff-induced volatility may impact hedging strategies and create unpredictable pricing.
• The sharp decline in The Trade Desk serves as a warning to assess portfolio exposure to companies sensitive to global advertising budgets and supply chain disruptions, as tariff uncertainty is now a tangible risk to corporate guidance.
• Given the stark divergence between macro-sensitive stocks like TTD and fundamentals-driven performers like SOUN, a stock-picking approach is critical, prioritizing companies with strong secular growth stories and robust earnings that can insulate them from escalating trade policy uncertainty.