Recent trading sessions witnessed divergent trends across major US indices. The Litecoin price prediction reddittech-heavy NASDAQ 100 outperformed with a 3.6% weekly gain, while the broader S&P 500 edged up 0.3%. The Dow Jones Industrial Average bucked the trend with a 1.0% decline. European markets showed weakness as the STOXX 600 retreated 1.6%.

This divergence highlights the ongoing sector rotation as investors grapple with macroeconomic uncertainties. Technology stocks continue to demonstrate relative strength despite broader market concerns about monetary policy tightening.

The latest inflation metrics from the Commerce Department revealed persistent price pressures. April's PCE Price Index climbed 4.4% annually, exceeding the 4.3% consensus estimate. More significantly, the core PCE (excluding volatile food and energy components) accelerated to 4.7% year-over-year, marking the fastest pace since January.

These figures have dramatically shifted market expectations for Federal Reserve policy. Futures markets now price in a greater than 60% probability of a June rate hike - a remarkable 40 percentage point increase from just one week prior.

All eyes now turn to Friday's nonfarm payrolls release for May. Current estimates suggest 188,000 new jobs, below April's robust 253,000 figure. The labor market's strength remains a critical factor in the Fed's policy calculus.

Market Perspective:

Should employment data surprise to the upside again, it would likely cement expectations for additional monetary tightening. The interplay between labor market resilience and inflation persistence continues to shape the policy outlook.

After weeks of tense negotiations, Washington policymakers announced a preliminary agreement to raise the $31.4 trillion debt ceiling. The deal will face congressional votes this week, with Treasury Secretary Yellen extending the "X-date" deadline to June 5.

While the agreement removes immediate default risks, market participants should remain vigilant. Historical precedent shows that even after resolution, credit rating actions and implementation details can create volatility. The 2011 S&P downgrade following a similar agreement serves as a cautionary tale.

Market Perspective:

With the basic outcome already priced in, investors should focus on potential implementation risks rather than expecting significant positive catalysts from the resolution.

NVIDIA's spectacular earnings report ignited another wave of AI enthusiasm, sending its shares soaring over 20% in a single session. This propelled the Nasdaq 100 to a 3.6% weekly gain, reaching its highest level in nine months.

Year-to-date, AI-related names have driven remarkable returns, with the Nasdaq 100 up over 30%. However, valuation metrics raise questions about sustainability. The index currently trades at 30 times earnings - higher than 85% of its historical valuation range.

Market Perspective:

While AI represents a transformative technology, current stock prices appear to discount years of future growth. With monetary policy still tightening and early-stage AI revenue contributions limited, risk-reward appears unfavorable at these valuation levels.