"The market is on a relief rally, after being beaten by some hawkish Fed communication earlier last month," said Jan Szilagyi, founder of Toggle AI. It's unclear how long it will last, he said. The relief rally has two parts, he noted. For one, the market had "fallen meaningfully due to very hawkish Fed," he said. Fed Chairman Jerome Powell welcomed the bond selloff but markets did not like that, he noted. "When the Fed spoke in a more balanced way, some traders found reason to buy again," he said. For two, leading indicators "started to blare about a very oversold market for the last few days," he said. "These sharp drops clear all specs and allow the market to restart," he said. From here, Szilagyi said "the markets are still at lofty valuations and that the Fed might change its tune again, this time turning hawkish."
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