Earnings (especially chips/hyperscalers) matter for short-term psychology, but persistent core inflation and the Fed's reaction function are the primary macro drivers. The new Fed chair may refine data but won't engineer a case for early cuts; cutting prematurely risks higher long-term yields (bond vigilantes). Falling oil helps headline inflation only marginally—core inflation trends remain elevated, keeping rates sensitive to earnings and global growth broadening.

The drop in oil prices (WTI below $70, Brent below $75) reflects positive sentiment from tanker backlog clearing, but this is likely overdone. The Strait of Hormuz will remain risky—tanker availability and insurance costs will keep the market choppy. Iran's demonstrated ability to threaten the strait has permanently changed the landscape, pushing investment into pipeline alternatives. Gas prices at the pump are not falling as fast as crude due to refinery capacity, summer blend switch, and global demand—Trump's criticism of Big Oil is misplaced.

Homebuilders are more bullish than headline new home sales suggest, aggressively buying finished lots. The market is K-shaped: higher-end homes ($950k+) sell well with cash buyers, while entry-level buyers struggle with affordability. The canceled bipartisan housing bill's impact is limited—supply issues are local (zoning, permitting), not federal. Builders are adapting with smaller homes and rate buy-downs to maintain volume.