Good morning! I visited the Economic Club of New York to see billionaire Rob Baron speak Tuesday. He shared his five rules for investing that helped him accrue a $45 billion portfolio:

Baron also told us he doesn’t pay attention to macro headlines.

We can’t quite say the same with this newsletter — especially the day after an inflation report.

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Mood reversal

Five weeks ago, the S&P 500 was down 15% for the year. Wall Street’s recession odds kept creeping higher, and investors braced for a tariff-fueled inflation flare-up.

President Trump’s tariff agenda, the consensus said, would surely tip the US economy into a stagflation scenario and sap financial markets in the process. 

But as the last century of stock market history reminds us, it pays to be an optimist.

As of this week, the S&P 500 has reversed its 2025 losses and the index is back in the green. Inflation has cooled for a fourth straight month, and doomsday forecasts have given way to more upbeat projections. 

The last time the S&P 500 reversed a year-to-date decline of 15% or more in less than six weeks was 1982, according to Bespoke Investment Group.

Small-cap stocks have surged too, with 44 names in the Russell 1000 now up at least 50% since April 8. 

Meanwhile, April’s Consumer Price Index hit 2.3% year-over-year, its lowest annual rate in four years, according to the Labor Department. It’s cooled every month of 2025 so far.

Some market watchers question whether new tariffs have impacted the inflation data yet.

Time will tell, but Wall Street banks aren’t waiting.

The combination of shifting investor sentiment, cooling inflation, and the US-China trade deal led a number of shops including JPMorgan, Apollo, and Goldman Sachs to slash their recession odds for 2025. 

Traders on the prediction platform Kalshi have similarly pared their bets for a downturn from 70% on April 30 to 37% on Tuesday. 

“The tail risk coming from a complete collapse in trade between China and the US has been removed,” said Apollo chief economist Torsten Slok.

“Looking ahead, the key issue for markets is to monitor the speed with which confidence is restored among consumers, corporates, and foreigners.”

The case for optimism is strengthening, and investors’ risk appetite has returned with gusto.

Our friends at DataTrek Research, Nicholas Colas and Jessica Rabe, put it well: 

“Nearly 100 years of US stock market history teaches us to embrace change rather than automatically assume it will cause permanent damage to structural future returns. The American system of capital allocation, innovation, and corporate management has an excellent track record of adapting and profiting from whatever changes come down the road.”

Market snapshot

Our investment club members got ahead of a 28% stock rally

Boeing stock hit a 52-week high on Tuesday. We told our Best Ideas Club members about it when it was nearly 30% lower from current levels.

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Elsewhere

💻️ Microsoft will lay off 3% of its workforce. That amounts to roughly 6,000 individuals. The tech giant is aiming to reduce management layers in the months ahead, and this is likely Microsoft’s largest layoff since 2023. (CNBC)

📈 Nvidia is back above $3 trillion. It’s once again more valuable than Apple, and it’s just behind Microsoft as the most valuable company in the world by market cap. The stock gained more than 5.6% in Tuesday trading, while other chipmakers also jumped. (Barron’s) 

UnitedHealth Group stock tumbled 18%. Its CEO Andrew Witty unexpectedly stepped down and the company suspended its guidance for the year. The stock has declined nearly 40% year-to-date. (Yahoo Finance)

Rapid-fire

Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day, unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at phil@openingbellmedia.com.