Fed Setup
The Federal Reserve faces a hard choice on its dual mandate of maximum employment and price stability. On the surface, employment sits at maximum, while inflation is still a problem. This inflation looks more like a supply shock than an overheating economy, so raising rates into an okay economy where inflation is not driven by consumer demand carries a risk: rising oil prices could push up recession odds. But the Fed watches the dual mandate, not oil, so on credibility grounds a 25 basis point increase is warranted.
The market will focus less on whether the increase happens and more on whether it is a single move or the start of a series. A single increase is not normal going back to 1997. The dot plot and the press conference matter most for reading the path from here. Higher yields and higher oil frame the whole setup.
Circle (CRCL)
Circle is a play on the Clarity Act, which would let securities be more regulated around tokenization and stablecoins. More regulation of stablecoins means broader adoption, which raises demand for the front end of the yield curve. Circle earns money from interest on the Treasury bills backing its stablecoins, so higher yields from Fed decisions help its revenue. The risk: the Clarity Act may not pass. A Senate vote on the Act was set for that afternoon, and crypto showed weakness that morning ahead of it.
Technicals: A strong rally came off lows in the 60s, forming a cup and handle shape - sharp decline, gradual bottom, then recovery. A target near 104 lines up with recent highs and an old low. The handle pullback filled a gap near 90. A broadening triangle with diverging boundary lines points to higher volatility. Other lows: 84, and a repeated floor near 78. Resistance zone runs 115 to 119, above the 104 high. The 5-day, 21-day, and 251-day EMAs cluster tightly between 89 and 93, marking an important area; watch for a break out of that range for direction. RSI momentum broke its upward green trend line and is trending down but holds above the 50 midline; it dipped briefly above 70 (overbought) with no staying power. A break below 50 would suggest more downside. Volume profile: node from 80 to 87, point of control at 81.50, upside node from 102 to 116. Circle traded down about 8% on the session, just below $90.
Bank of New York Mellon (BK)
At the Barclays conference, the CFO said the turnaround plan entered a period of accelerated growth and called the turnaround complete. The main reason for the pick is again the Clarity Act. As securities shift into tokenization and stablecoins, BNY Mellon benefits as a custodian; digitization of assets is another catalyst. It services about $59.4 trillion in custody and administrative assets. Q1 revenue grew 13% to about $5.41 billion; EPS increased 42% to $2.25. Growth spanned security services and market and wealth services. Revenue growth exceeded expense growth, giving margin expansion, a key fundamental sign. The thesis: additional earnings momentum not yet priced in, from custodian chances tied to tokenization, but it hangs on the Clarity Act passing for longer-term revenue follow-through.
Technicals: A rising wedge formed - an upward trend line across the lows and a shallower line across the highs, a bearish setup that played out to the downside. Price broke below relative lows at 157 and is approaching relative lows near 152; beyond that, 148 stands out. A move back above 157 that also breaks the short-term downward line could reach 165, a repeated ceiling. The 152 area was the low after the July 15th earnings event, so it could be notable support. Price broke below the 5-day and 21-day moving averages yesterday and is on pace to fall below the 63-day EMA near 155.47. RSI holds above 30 (oversold); watch for weakness if it moves back toward that zone. Volume profile: node from 157 to 164, heavier activity from 143 to 146, smaller node near 150. BK traded at 153.63, down about 2.5% on the session.
Apple (AAPL)
Apple is not tied to the Clarity Act. It stays the stock pick of the year. Yesterday's new iOS introduced many AI features, making Apple the consumer pick for AI because it is deeply integrated with the new product lineup. The foldable iPhone draws attention. Consumer demand can be read through trend searches on Google Insights, social media, and TikTok, which shows how important marketing is now. Apple checks those boxes. Noise around the product, good or bad, means the message is spreading.
AI spending also flows through Mac demand. Nvidia (NVDA) is the semiconductor needed to build large language models. For individuals who want to run AI on their own network or home computer, Mac products fill that role - the Mac Mini went viral for running AI locally. Apple has a new CEO focused on product, which should show in this iOS release with strong enhancements, a slow move into AI and into the broader Apple ecosystem. Rates remain a challenge for the overall market, but Apple stays a top pick for the consumer AI reason.
Technicals: A big drop came after earnings; highs hit 344.57, then a sharp haircut following the earnings event on the 30th. From there, a double bottom formed at 300 and 313. A gap filled near 329 to 330. A smaller gap before earnings sits at 337 and was nearly but not fully filled. Price retreated to around 330, still inside its channel. Moving averages sit in the most bullish order, fastest to slowest, and keep diverging apart; convergence would signal a possible trend change. Price touches the 5-day EMA at 328.38 (dark blue), with the 21-day at 321 just below. RSI sits between its red (downward) and green (upward) trend lines and holds above the 50 midline, a bullish lean. Volume profile: the most important node is 308 to 314, with a sharp drop in trading volume above 336. Apple traded at 329.0, down about 1% on the session, but up more than 7% over the last month.
