David Russell, global head of market strategy at TradeStation, joins the broadcast to break down the market’s reaction to a 6–3 Supreme Court decision halting tariffs tied to Donald Trump, arguing that negative macro headlines are having less impact on markets than many expected. Russell explains that strong double-digit earnings growth and continued momentum in AI-related sectors are currently the dominant forces driving equities, outweighing concerns about GDP data or trade tensions. Looking ahead to earnings season, he highlights Nvidia as a key catalyst, noting that strength from related firms like Micron and pullbacks in leaders such as Microsoft could set the stage for renewed leadership from the Nasdaq. He also addresses concerns surrounding private credit and data-center demand, referencing firms including Blue Owl Capital and Apollo Global Management, while pointing to infrastructure-linked companies like Caterpillar, Quanta Services, and Seagate Technology as signals that the AI-driven investment cycle remains intact. Overall, Russell emphasizes that despite volatility and market fears, underlying trends suggest momentum could ultimately resolve to the upside.
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Let's bring in our first guest in the broadcast.
He joins us from remote.
This is David Russell, global head of market strategy at TradeStation.
David, thanks a lot for being here.
Investors had no shortage of things to try and digest ahead of today's tape.
I've got to get your perspective here, David.
What were your top takeaways given that 6 to 3 Supreme Court decision with regards to saying, hey, Donald Trump's tariffs, not so fast.
David, your thoughts?
Yeah, I think JD, it just shows that we have bad news.
It just does not really play out.
Everyone was expecting this to be a big issue over time.
Most people, I think, thought that, you know, tariffs could remain more of a risk, and it just kind of evaporates.
And I think what we're seeing here in this market is that the macro situations are really not the bigger driver.
We have monster earnings growth right now with double-digit earnings growth expected every quarter this year, and I think that's the real.
Thing we need to be focused on, we still have the AI trade remains in place.
It has some tarnishes, but ultimately here we have an economy that despite what the GDP says, we're seeing the industrials perform.
We're seeing earnings growth, and overall these numbers, and I would say the overall macro news and even things like tariffs, they're just not that important because right now we have some very significant earnings growth and that's really what's driving things.
David, you mentioned earnings.
You mentioned the durability of the current AI trade that teases up perfectly for the earnings calls of all earnings calls.
We get it next Wednesday.
How about Nvidia?
What are you paying attention to to one of the most consolidated, one of the most important names in the S&P 500 next week, David?
Yeah, it's entrapped in this range here.
Um, and I think right now, the thing that's very interesting is look at the big names like Micron and the other companies that are related to that overall business.
Um.
You know, there's another one.
VRT recently had strong earnings.
These companies are not showing any kind of weakness that you would expect that there was going to be any problems with Nvidia here.
So I think it's one of these things when everyone wants to be worried about what might happen, but we see this in tech when things sit and they pause, and then the good news comes and they all rush.
So right now this is behaving very much the way we see tech often perform.
You'll see it basically consolidate before the big news.
And then the activity happens.
So I think next week could be a time when people pivot back to AI and we have a lot of these large tech names that have pulled back significantly, things like Microsoft and things like that.
And if we get any kind of rebound in those as well, we could see leadership shift back to the NASDAQ, and I think that's very interesting you mentioned the Russell being down.
The NASDAQ, I think, just had its best week since the beginning of January in over a month here.
So we've been in a little.
Mini bear market for tech.
There's been the worries about things like Blue Owl and these different, you know, issues with data centers.
But then next week we have AI, we have, you know, Nvidia, and this is where the attention is going to return.
So I think right now we have seen this kind of move toward things like the small caps and things like the value names.
That might not be the case going forward.
We might see that return to the growth at least for a period of time.
Yes, you mentioned private credit concerns there in the name of Apollo and you name checked there at Blue Owl Capital a few moments ago.
Before I let you go in about a minute left, what else will we be looking for?
We've been talking about the fact that the AI question has kind of rolled, right?
It rocked commercial real estate.
It rocked the software names.
Now it kind of worked its way into private credit.
What will you be looking for in the weeks ahead, David, to give you some confidence that we've steadied the ship despite all of these few weeks of volatility?
I think it's the hardware names really at the end of the day that matter, and I'm talking about the names like the microns and those kind of names and the and the fiber optics as well.
We've seen this continued strength of the fiber optic names.
We are seeing that the data center construction continues one way or another.
We're seeing it in other names like Caterpillar, which have this connection to data.
Center we're seeing all these power related companies like Qantas Services that are involved in, you know, electricity construction and upgrades.
All this stuff is tied to the data center one way or another.
So this is something where this freight train continues to move down the track.
There's a lot of worries along the way.
There's things that go bump in the night, but it's not breaking the underlying.
Buying trend of what we're seeing and this continues to filter across the stock market and across earnings.
So I think ultimately what we're seeing is, is that if these big names, you know, like your Seagates and your Microns, if those continue to show because those are ancillary to AI, if those remain strong, which they have, it's telling us that the investment cycle is not broken yet.
And unless we get some really unusual news or something dramatic, you know, geopolitically, it's in a spot where the momentum remains in effect.
We've had a long period of consolidation and a lot of worries, but it could resolve potentially to the upside.
Things that go bump in the night, spooky, ominous words here on a Friday despite the fact we've got major market gains.
David Russell, terrific guest.
Thanks for kicking off the broadcast.
Please come back and see us here on Taking Stock anytime.
David is global head of market strategy at TradeStation.