Comments based on information available as of 6:00am CT on 7/25/2025

Growth: The AI-A-Team

In recent years, markets were led by the “Magnificent 7” — seven dominant tech firms. But lately, tech alone isn’t enough. Leadership within that club has shifted to those excelling in artificial intelligence (AI). The top three invested over $84 billion in capital equipment in 2024, and Bloomberg surveys suggest that could rise 50% in 2025. New tax incentives from the One Big Beautiful Bill Act may spur broader investment across industries and maybe broaden out the market strength, too.

Inflation: A Time Of Testing

Pricing power always matters to businesses. That helps them make and protect profits. With “final” tariff rates coming in, the ability to pass through tariff costs to consumers will be put to the test. Earnings season is beginning to unveil who has and hasn’t been able to protect their bottom lines with pricing power.

Policy: Will They, Not Should They

Will the Fed cut rates on July 30th? Should they? Those are two very different questions. What matters for investors is whether the Fed will, not whether they should. It’s highly unlikely we’ll see any policy change in July. September is a different story. By then, inflation will likely still look tame and the majority of the committee that sets policy may give up on their fears of tariff-fueled inflation.

Looking Ahead: When A Crowd Becomes A Mob

Market prices often reflect the “wisdom of crowds”—a collective weighing of fundamentals, expectations, and beliefs. But sometimes, that wisdom gives way to the madness of mobs. We’re seeing this again with the resurgence of meme stocks, where price moves are driven more by social momentum than business fundamentals. Like viral trends online, speculative buying can catch fire quickly—and fade just as fast. Predicting which stock will become the next sensation is difficult; knowing when the crowd will lose interest is also hard.