Good morning, traders. 

Well, the bulls got what they wanted yesterday — and then some. 

A combination of relief headlines, soft data, and a curious pop in energy names had the indexes kicking higher early. 

But before you start throwing high fives and piling into risk, let’s figure out what’s real, what’s hype, and what you need to watch before the party fizzles.

Here’s what drove the rally — and what could kill it just as fast.

Trump Backpedals on China Tariffs

The big driver Wednesday morning? Trump walking back his tariff threats on China. 

That sent futures into liftoff mode. 

The market always reacts well to reduced trade tension, and this was no exception. 

Traders saw “less friction” and immediately went into risk-on mode, piling into tech, cyclicals, and high-beta names.

Now, look — this isn’t the first time we’ve seen this script. 

The market gets spooked by tariff talk, then breathes a sigh of relief when the tone softens. 

Rinse and repeat. 

But that doesn’t mean it’s a fake rally. It’s real money. 

Just be aware that it can reverse quickly if the rhetoric picks back up. 

Don’t marry your positions.

PMI Data and Tea Leaves

At the same time, we got softer-than-expected PMI numbers. 

That might sound like a red flag, but here’s the twisted logic of the market right now: soft economic data = less Fed pressure. 

Traders are betting that weaker growth gives the Fed more room to chill, maybe even lean toward easing.

That adds fuel to the rally — especially in interest-rate-sensitive areas like tech and homebuilding. 

The bond market’s already responding, with yields backing off slightly, which adds more juice to the move higher.

Energy: Something Doesn’t Add Up

Now for the interesting part — and this is where I think there’s opportunity.

Energy names were catching a bid Wednesday, especially BP. 

That’s thanks to some chatter about an activist investor taking a stake. 

The market loves a good activist story. 

It means change, shake-ups, maybe asset sales or strategy pivots. And BP’s been stuck in the mud long enough that any catalyst looks good on the surface.

But here’s what’s strange — oil isn’t really moving. WTI is flat to down slightly. 

There’s no commodities tailwind here. 

So, why is BP ramping?

In my view, this smells like a short-term pop that’s going to get faded. 

The activist angle is interesting, but if crude’s not backing it up, it won’t last. 

Stay Sharp, Not Complacent

Wednesday’s rally was built on relief and speculation — not hard data. 

That can work for a quick trade, but don’t confuse it with a new bull cycle. 

The economy is still slowing. 

The Fed is still juggling mixed signals. 

And geopolitics is a headline risk every day.

Use moves like this to pick your spots — but keep your stops tight and your exits planned.

 – Jeff

And while we’re on the subject of keeping things tight, recent market volatility is creating some of the biggest trading opportunities of the year. 

Join Aaron Hunziker today at noon ET to learn how to lock in overnight gains like 80% on INTC, 98% on FSLR and even 107% on SPCE.*

*Past performance does not indicate future results.