Tech ripped, but the Fed is raining on the parade

April was basically a joyride

Wall Street didn’t just rally in April — it left skid marks. The Nasdaq 100 jumped 15.6% for its best month since 2002, the S&P 500 added 10.5%, and the SOXX semiconductor ETF ripped 40% for its best monthly performance ever. If you owned AI-linked chips, you were basically the person at the party handing out the good snacks.

The Fed showed up with a rain cloud

Then the Federal Reserve reminded everyone it still exists. The latest FOMC meeting was the most divided since 1992, with Governor Stephen Miran pushing for a 25-basis-point cut while three regional Fed presidents argued against an easing bias. Chair Jerome Powell also said he’ll hand the reins to Kevin Warsh on May 15th, but will stay on the Board of Governors — which is Washington-speak for “the drama is not over.”

Inflation just won another round

Thursday’s data didn’t help the bulls’ case. First-quarter GDP came in at 2%, which was softer than expected and mostly held up by AI-related capex. But the Fed’s favorite inflation gauge rose to 3.2%, drifting farther from the 2% target. Translation: growth is fine, but prices are still acting like they’ve got somewhere to be.

Energy is back in the chat

Meanwhile, geopolitical jitters kept oil traders busy. Iran talk stalled, Brent crude briefly surged near $120, and then a fresh proposal routed through Pakistani mediators cooled things off. Even so, the April ISM Manufacturing PMI held at 52.7 — solid territory — while prices paid jumped at the fastest pace since late 2021 as oil and diesel costs leaked into factory costs.

Big picture: April looked like a victory lap for tech, but the Fed, inflation, and energy prices are basically tapping Wall Street on the shoulder and saying, “Cute rally. Now prove it’s durable.”