Bill Baruch laid out the three factors he flagged to clients two weeks ago, back when the SMH was roughly 25 percent off its highs and he thought the selloff was overdone. First, the Fed is misunderstood. He believes hawkish expectations are offsides, pointing to Powell’s comment that oil price shocks are not something monetary policy should try to control. He expects the Fed to look through the recent rise in oil, sees disinflation in components underneath the headline, and thinks the hawkish anecdotes get incrementally walked back into the midterms. Second, politics and oil. He expects some engineered passage through the Strait of Hormuz, on the logic that Trump does not want voters heading to the midterm ballot box with a war ongoing and oil above 90 dollars. Third, compute. Earnings confirmed the AI build-out is compute constrained, with Alphabet saying on its call that it will purchase more compute while building out its own capacity. Despite the sharp move off the lows, Bill says those three pillars have not changed, and he sees them as the catalyst that takes the market to 8,000. Watch the full discussion here.