Happy Overvalued Stocks Day to all who celebrate.

After three straight record closes, Jerome “The Pessimist” Powell climbed on stage in Rhode Island and gave us a doomsday message that would have Ray Dalio and Robert Kiyosaki smiling ear to ear.

The S&P 500 (-0.6%), Dow (-0.3%), and Nasdaq (-0.9%) all took a dive after J-Pow pretty much said: Yeah, equities are kinda pricey right now, maybe stop YOLO’ing your paycheck into Nvidia calls.

The cold shower came less than 24 hours after Monday’s melt-up, when Nvidia (+$100B OpenAI bankroll) pushed the Nasdaq to another ATH (thanks Jensen).

But today, Powell pulled the aux cord with one line: “By many measures, equity prices are fairly highly valued.” And just like that stocks were cooked.

Known for his “word salads,” he actually laid it out pretty simply: inflation’s hanging around like a Taco Bell fart, the job market is down bad, and there’s no “risk-free path” forward. Move too fast and inflation rips higher. Move too slow and jobs collapse. Basically, he’s playing financial Minesweeper and hoping not to blow us all up. Fed Governor Michelle Bowman piled on, saying they’re already “at serious risk of being behind the curve.” In plain English: we may have already screwed the pooch.

Predictably, the AI hotshots got their teeth kicked in before the rest. Nvidia gave back 3% as investors suddenly wondered if the $100B OpenAI bromance was starting to look like a rerun of 1999… and also, who’s footing the electric bill for all these server farms? Oracle, after a 50% sprint over the last three months, coughed up 4% in a single session. Even Amazon slipped 1%, proving that no amount of AI cloud hype can survive a Powell buzzkill.

On the flip side, the Russell 2000 small caps actually hit an intraday record. Which means your idiot friend holding regional bank ETFs finally got to text the group chat.

Oh and we had another Boeing bombshell (except this one was good for once). Trump jumped in to juice Boeing’s (+1%) stock on Truth Social, bragging about Uzbekistan Airways ordering 22 new Dreamliners in an $8B deal “creating 35,000 jobs.” He also teased a “huge” China order in the works (Though if it’s anything like the last “huge” China deal he promised, don’t hold your breath.)

As for what’s next, all eyes are on Friday’s PCE report (the Fed’s favorite inflation gauge). If it comes in hot, Powell will look like the guy who promised a road trip with the family, then immediately turned the car around.

Until then, traders are left debating two questions:

1. Are we living through the second coming of the dot-com bubble?

2. Or is this just Jerome Powell telling us to put the credit card down before we max it out on AI stocks and Lululemon joggers? 

I’ll let you decide for yourself.

If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.

At the time of publishing this article, Stocks.News holds positions in Amazon as mentioned in the article.