Stock and crypto bulls are watching for rate cuts to drive the market higher: Opening Bid top takeaway

It’s Fed decision day for the markets.

Market bulls have sent stocks to fresh records this week, banking on a big gift from Fed Chair Jerome Powell. Markets expect the Fed to cut interest rates by 25 basis points and leave the door open for more rate cuts.

Anything short of that will be a big gift for … you guessed it … the bears! Such is life in the markets.

“If we see Jay Powell become maybe more dovish than what the market expects, that could be actually taken as a negative because more dovish would suggest maybe he’s panicking a little bit. Maybe he feels he’s behind the eight ball. And then you could see the market retrace,” said Slatestone Wealth Management chief markets strategist Kenny Polcari on Opening Bid.

Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments

“And if it does, you can be sure that all the highfliers and the names that have really participated the most are going to be the first ones to get hit.”

The AI trade spreads

President Trump has landed in the UK with First Lady Melania and tech leaders from the likes of Nvidia (NVDA) and OpenAI (OPAI.PVT). AI giants are wasting no time making announcements that coincide with Trump’s UK arrival.

Marc Benioff-led Salesforce (CRM) said it will invest $6 billion into its UK operations by the end of the decade as it tries to make the country its European AI hub. Microsoft (MSFT) said it’s investing $30 billion in the UK between 2025 and 2028.

Meanwhile, China’s AI stocks have ripped to new records as optimism spreads further. The Hang Seng Tech Index (HSTECH.HK) closed at its highest level since Nov. 21. Baidu (BIDU) and Alibaba (BABA) saw very strong sessions.

“I don’t know if this is a bubble,” Polcari said, adding that the infrastructure buildout for AI remains in its early innings. OpenAI CFO Sarah Friar drove home that point to me in a recent chat, and so did CoreWeave’s (CRWV) co-founder and CEO Michael Intrator.

Crypto comeback

Somewhat under the radar, bitcoin (BTC-USD) prices have broken out of a trading range the last five days as the US dollar reached a four-year low. Crypto insiders tell me the crypto market is also readying another charge higher as the Fed begins to cut rates — which could create even more pressure on the US dollar.

I spent some time with first son Eric Trump and one of his crypto partners, Asher Genoot of Hut 8, at Trump Tower on Tuesday afternoon.

Besides being executive vice president of the Trump Organization, Eric is also the co-founder of the newly public crypto miner American Bitcoin (ABTC). Genoot’s Hut 8 — where he is CEO — provides the infrastructure (power, back office services, etc.) that allows American Bitcoin to mine bitcoin.