Inside Markets — Market Focus

It has been said that the market can only focus on one or two things at a time. In the current environment, those two things are trade developments and the potential for macro fallout. In our view, the market has lost interest in AI momentum that seems to be continuing without a pause. On its Q1 earnings call, MSFT noted that it processed >100T tokens in Q1, up +500% YoY and cited ~15M GitHub Copilot users, up +400% YoY. During its earnings call, AMZN called out ‘an explosion of coding agents’ over the last few months, while DUOL added 148 language courses over the last 12 months using AI inferencing, while it took more than 12 years to develop the previous 100 courses. On a related topic, Q1 GDP data revealed a 5.5% YoY increase in US power demand vs. an average of just +0.6% YoY increase over the last decade.

We have covered this a lot lately, but feel it is important to reiterate that a sustained (two consecutive days) SPX close above the 5750-5785 range would invalidate the bearish trend dynamic that surfaced after the April 2 reciprocal tariff announcements.