After a powerful rebound from April’s lows, US equities hit resistance last week as bond yields surged, tariff risks re-emerged, and investors turned their attention back to fiscal discipline. The selloff wasn’t disorderly, but it was revealing. For all the recent strength in tech and breadth, this remains a market acutely sensitive to policy noise and bond market supply dynamics.

Yet even amid the volatility, the broader setup hasn’t deteriorated. Positioning is cautious, sentiment is fragile, and forward momentum depends heavily on the week ahead, anchored by Nvidia (NASDAQ: NVDA ) earnings, core PCE inflation, and the next round of Treasury auctions.

A Repricing of Policy Risk, Not a Breakdown in Growth

Last week’s pullback was driven by Washington, not Wall Street. A weak 20-year Treasury auction triggered a rise in yields midweek, followed by the House passing President Trump’s "one big, beautiful bill"—a tax-and-spend package that, on net, adds $3 trillion to the deficit by 2034. Investors responded by pushing the 30-year yield above 5.04% and the 10-year toward 4.52%, compressing equity multiples and hitting high-duration assets hardest.

Then came Friday’s tariff headline: 50% duties on EU goods, and a 25% hit to Apple products made outside of the United States; Apple shares (NASDAQ: AAPL ) dropped 3%, and risk sentiment weakened into the weekend.

The walk-back was swift. Trump announced an extension to the EU tariff deadline, pushing negotiations to July 9, and futures bounced sharply to open the new week. But the market is learning that volatility tied to fiscal and trade policy isn’t a one-off. It’s becoming a structural input.

Treasury Auctions Now Drive the Tape

What’s changed in recent weeks is the shift in market drivers. Inflation data and Fed rhetoric have taken a back seat. Treasury auctions and the global appetite to fund U.S. deficits are now the market’s primary concern.

The failure of last week’s U.S. 20-Year auction raised alarm bells. If buyers are demanding a premium to absorb supply, and deficits are accelerating without credible offsets, then the cost of capital will remain elevated and equity multiples will remain under pressure.

At the same time, hedge funds are significantly net short U.S. equities, offering a cushion to the downside. Each dip brings in new capital, keeping drawdowns contained. But it also means rallies remain hesitant and tactical until the bond market stabilizes.

Trade Risk Postponed, Not Resolved

The tariff extension is welcome, but July 9 is now a market-critical date. A constructive deal with the EU—landing around 10% tariffs—would likely be viewed positively. But investors know the script: Trump has used tariffs before as a bargaining tool, creating whipsaw price action that can upend positioning in days.

Complicating the outlook is the parallel U.S.-China trade window, where tariff reductions from both sides are in place through August 12. Any sign of progress there would support risk assets. Any derailment could reinforce a stagflationary narrative that markets aren’t priced for.

In short, we’re not done with tariffs. We’re just in a holding pattern.

Bitcoin: Leading Signal in a Liquidity-Driven Cycle

Amid this macro fog, Bitcoin continues to trade with clarity. After touching $111,000 last week, BTC corrected briefly to $106,000 before bouncing back toward $109,000. The pullback flushed out over $200 million in liquidations, including a notable $1B short from a high-profile whale—closed at a $15 million loss.

The key takeaway: the dip was absorbed. There was no panic. Just renewed interest.

Bitcoin’s breakout above $106,800, a key resistance from the last cycle, marks the start of what appears to be the next leg higher. The target range is now $116,000–$128,000, with sustained closes above $106,800 confirming the breakout.

Crucially, spot ETF inflows have remained resilient. Since May 1, Bitcoin ETFs have posted consistent inflows, with over $44 billion in net assets and multiple $600M+ days. Ethereum ETFs are also gaining ground, led by the recent $110M single-day flow.

Macro conditions support this. Global M2 is growing. Fiat credibility is softening. And fiscal policy is expanding faster than central banks can offset. In that world, scarce, hard-capped assets like Bitcoin attract long-duration capital, not just speculative flows.

Adding to that:

• FTX creditor repayments begin May 30, with over $5B in fresh liquidity entering the system—potentially reallocating into digital assets.

• The Bitcoin 2025 conference (May 27–29) will feature political and financial heavyweights like Michael Saylor, Cynthia Lummis, and the Trump family. Last year’s event preceded a rally from $60K to $70K.

• A cooling in tariff threats has also lifted risk appetite across crypto, with Bitcoin responding positively to the trade negotiation extension.

Put simply, Bitcoin is not just bouncing. It’s building a base for the next structural leg higher. My $150,000 target remains in play. The flows, the backdrop, and the behavior all point higher.

Nvidia: Market Anchor or Sentiment Catalyst?

This Wednesday, Nvidia (NVDA) reports what may be the most closely watched earnings of the quarter. The Street is expecting $43.3 billion in revenue—up 66% year-on-year—and $0.88 in EPS, with Data Center revenue projected to jump 74% to $39.2 billion. But the report will be judged on more than just headline growth.

Gross margin is one to watch. Last quarter’s adjusted margin hit a record 76%, and the Street is looking for a repeat. Any sign of margin compression could raise questions about pricing power—especially given H100 price moderation and potential mix shifts toward inference chips.

Regionally, all eyes will be on China sales, expected to hit $6.2B—up 150% YoY, but still under pressure from shifting export controls. Nvidia’s ability to offset that with sovereign demand (Middle East) and U.S. enterprise sales will be key.

But the real lever is guidance. With annualized revenue tracking near $170B, investors want clarity on the next phase of hyperscaler capex. Blackwell ramp expectations, 2025 customer pipelines, and commentary on AI infrastructure demand will all shape the market reaction.

I remain bullish. Nvidia’s competitive moat remains wide:

• Sovereign-scale GPU orders from Saudi Arabia (Humain) and the UAE (Stargate II)

• Rapid infrastructure expansion through CoreWeave and Foxconn

• Strong execution despite a $5.5B write-down tied to U.S. export restrictions

Technically, NVDA has been range-bound YTD but remains +40% over 12 months. If earnings and guidance deliver, a breakout above $152 could trigger renewed leadership in the AI complex.

This isn’t just about one stock. It’s a referendum on the durability of the AI infrastructure trade.

What to Watch: 3 Critical Catalysts

Markets are fragile but not broken. With just 5.5% between current levels and all-time highs, the path forward hinges on three data points:

1. Nvidia earnings (Wednesday): If the AI story is intact, tech leadership can resume.

2. Core PCE inflation (Friday): A soft print would reinforce the “peak rates” thesis and ease pressure on the long end of the curve.

3. Bond market stability: Treasury auctions must attract solid demand. Another weak sale could shake confidence across risk assets.

If all three deliver, a renewed push higher into June is likely. If not, the 200-day moving average on QQQ (~493) becomes a key battleground.

Closing Thought: This Is Not a Market in Retreat

The price action says caution. The positioning says opportunity.

We are in a macro transition—one where policy uncertainty, bond supply, and geopolitical recalibration are driving short-term volatility. But beneath the surface, the structure remains bullish: liquidity is rising, positioning is defensive, and long-term demand for innovation, AI, and digital assets is intact.

The risk isn’t being in this market. It’s missing the turn when it comes.