Equity markets advanced last week, with the S&P 500 gaining over 3.0% at the session's high. The market is in melt-up mode despite a hawkish FOMC that indicates 2 more interest rate hikes are on the way. AI and a positive re-valuation of the outlook for AI-related tech drive the melt-up. NVIDIA is leading the charge, but names like Oracle and Adobe are in the mix. The takeaway is that the cloud is booming with AI, and any company involved in the hardware, infrastructure, or services end of the business is booming along with it.

This week will be a test for the market. There are few earnings reports and economic releases to drive the action, so the market may have a hard time moving much higher in the near term. The next significant catalyst is the PCE Price Index which will be released in 2 weeks. Another hot report will seal the deal on a 25 basis point hike and may convince the market that Mr. Powell and the FOMC were serious in saying 2 more hikes were coming.