Coming out of the Iran conflict, recent market gains continue to build both momentum and a renewed sense of confidence among investors. Meanwhile, the upcoming approval of a new Fed Chair may help remove another layer of uncertainty from the market—something Wall Street tends to welcome almost as enthusiastically as lower inflation and stronger earnings. Through it all, Sowell’s trend-following gauges remain stable, disciplined, and fully invested.
The Sentiment Gap – Nothing Matters But Bits & Barrels
There is a particular kind of giddiness that settles over Wall Street when the technologists and the diplomats decide, however briefly, to pull in the same direction. It is a spirit of "bounded optimism"—the sense that while the world is still a messy place filled with fractious nation-states, the plumbing of our future is being laid with remarkable speed.
This week, the markets didn't just climb; they exhaled. The S&P 500 rose 2.36% to a record 7,398.93, while the Nasdaq Composite surged 4.52%. Yet, look beneath the surface of these indices, and you’ll find a landscape as divided as a 19th-century map of the Balkans. This was a narrow, high-octane rally fueled almost exclusively by the digital architects of the AI age. Across the street, the U.S. Treasury market found a rare moment of serenity; yields softened after an early-week spike, with the 10-year Treasury slipping to 4.38%, as the "geopolitical risk premium" evaporated like morning mist over the Potomac.
The Catalyst: Diplomacy and the Digital Loom
The week’s primary engine was a rare alignment of geopolitical cooling and silicon heating. For months, the specter of a closed Strait of Hormuz had acted as a tax on global growth. But with an Iran peace deal nearing, the "war premium" vanished. WTI Crude collapsed from $104 to $94.6 per barrel—a move that sent Energy stocks tumbling 5.47%. In the strange alchemy of modern markets, peace in the Middle East was a bearish signal for oil rigs but a bullish one for everything else.
Simultaneously, we are witnessing the "Earnings Epiphany." We are currently reliving the Great Build-out of the mid-90s, but with significantly better balance sheets and foundation. In 1995, we were laying fiber-optic cables for a revolution we couldn't yet define. Today, we are stacking HBM (High Bandwidth Memory) for an intelligence we are only beginning to converse with.
The rise of the internet was defined by speculative "eyeballs" and the frantic wiring of the world. Today’s AI boom is more industrial. It is a capex-heavy era where profitable titans are building a digital loom. The Mag-7 had a formidable run—NVIDIA gained 8.4%, and Apple rose 4.7%—but the true pyrotechnics were found in the PHLX Semiconductor Index, which gained a staggering 11.1%. Memory and chip names went vertical: Micron surged 37%, SanDisk 31%, AMD 26%, and Intel 25%. We aren't just clicking links anymore; we are building the cognitive infrastructure of the next century.
Sector
Performance
Narrative
Technology / Semis
+11.1% (SOX)
The insatiable appetite for AI infrastructure.
Financials
-1.1%
Dragged down by a flattening yield curve and regulatory uncertainty.
Utilities
-3.6%
High-yielding "bond proxies" lost luster as growth took center stage.
Energy
-5.47%
The victim of a looming peace deal and $94 oil.
The Two-Track Economy: Factories vs. Feelings
If you read the University of Michigan Consumer Sentiment report, you’d think we were living through a Dickensian winter. Sentiment plunged 3.2% to a record low of 48.2, as families feel the persistent pinch of high prices. And yet, the "hard data" tells a story of a manufacturing and labor engine running at full throttle.
Labor Force: Last Friday’s jobs report was a masterclass in resilience. Nonfarm payrolls rose by 115,000 (shattering the 65,000 estimate), while ADP private employment added 109,000 jobs—the strongest growth since early 2025.
The Factory Floor: Factory orders jumped 1.5%, vastly outperforming expectations.
Housing: New Home Sales rose 7.4% in March, proving that even with the 30-year Treasury yield hovering near 4.95%, the American desire for a picket fence remains undeterred.
We are seeing a "sentiment gap." The consumer is grumpy, but the economy—buoyed by the massive AI buildout—is profoundly sound.
The Fed: Continuity in the Constitutional Fog
In Washington, the air is thick with speculation as the Senate moves to confirm Kevin Warsh as Fed Chair before Jerome Powell’s term concludes on May 15th. The cocktail party chatter centers on whether Warsh will be a White House puppet or a guardian of the dollar.
But markets crave continuity over drama. With Warsh, a former Fed governor, and Jerome Powell staying on as a Fed Governor until 2028, the FOMC's institutional memory remains intact. This is a committee of twelve, not a solo act. The yield curve flattened slightly this week as markets processed this stability, with two-year yields ticking up to 3.895%. Despite the solid data, the Bloomberg rate probabilities show a growing, if still hesitant, belief that a cut might finally be on the horizon as inflation tailwinds from lower oil prices take effect.
Looking toward the week ahead, the market’s focus will shift from the geopolitical stage to the cold, hard mathematics of the American checkbook. We await the arrival of the CPI and Core CPI data, followed closely by PPI and Core PPI; these are the twin pillars upon which the Fed’s next move rests. With energy prices cooling, the headline figures may offer a reprieve, but it is the "stickiness" of the core numbers that will reveal if our current prosperity is truly non-inflationary. We will also look to Industrial Production and Capacity Utilization for confirmation that the AI-led factory boom isn't just a digital mirage but a physical reality.
“The President, as you might know, much like virtually all presidents either I’ve known or studied, presidents tend to be for cutting rates. I think the difference is President Trump expresses it quite publicly without surrogates or subterfuge, but Presidents want lower rates. But Fed independence is up to the Fed.”
— Fed Chair Nominee Kevin Warsh, Senate Banking Confirmation Hearing, April 26, 2026.
NEXT25: The Sharks Aren’t Looking for Products Anymore
By Gregory Lai, CFA
At NEXT25, we hosted a Shark Tank-style panel where investment firms pitched their ideas while Alex Hsiao and I fired questions from beneath our Shark hats.
On the surface, it was entertaining. Underneath, it revealed something much bigger happening across the wealth management industry. The sharks aren’t really looking for products anymore, at least not in the old sense.
Ten years ago, a great pitch often centered on performance numbers, back-tests, factor exposure, or some version of “we outperform the benchmark.”
That world still exists.
But the questions advisors ask today are different:
Can you help me scale?
Can you simplify complexity?
Can you make my business more valuable?
Can you strengthen my client relationships rather than compete with them?
Can you help me grow without losing my identity?
That’s a fundamentally different industry conversation, and honestly, probably a more mature one. You could feel this shift throughout the NEXT25 Summit.
Nearly every session — whether focused on AI, cybersecurity, advisor partnerships, or portfolio construction — pointed toward the same underlying reality: wealth management is professionalizing at an accelerated pace. Or at minimum, as Patrick Hannon of Fidelity suggested, advisors are finally starting to take better notes.
The independent advisor of today increasingly resembles the CEO of a sophisticated operating company.
They are managing:
technology stacks,
compliance infrastructure,
investment platforms,
marketing,
succession planning,
cybersecurity,
client experience,
and increasingly, AI integration.
That’s no longer a small-business lifestyle practice. That’s enterprise management. Ironically, the more complex the industry becomes, the more valuable simplicity becomes.
That may have been the hidden theme of the entire conference. The firms generating the most interest weren’t necessarily the ones with the most complicated solutions. They were the ones that reduced friction.
The firms that could help advisors:
reclaim time,
institutionalize process,
deepen trust,
and scale relationships.
In many ways, this is what OCIO has quietly become. Not outsourcing. Infrastructure. That distinction matters..
The best advisors don’t want to hand over their client relationships. They want partners who strengthen those relationships.
That’s a very different value proposition than the asset management world historically understood.
There was another interesting undercurrent at NEXT25 as well: realism. Not fear. Though former Navy SEAL David Rutherford certainly brought some intensity. Not euphoria. Dr. Jason Hsu made a compelling case for long-term optimism. Just realism.
Or perhaps slight paranoia after hearing Morgan Stanley cybersecurity expert Rachel Wilson discuss cyber risk in an increasingly uncertain world. Most people in the room understand markets have changed. Concentration risk is higher.
Passive indexing increasingly means concentrated indexing, as Michael Green’s work demonstrates. Technology disruption is accelerating.
Clients expect faster communication and deeper customization. The operational burden on advisors keeps growing.
And AI — whether people fully admit it yet or not — is beginning to force every firm to reconsider how work gets done. Which means the winners in the next decade probably won’t be determined solely by who has the best investment products.
The winners may be the firms that best combine:
institutional capabilities,
scalable infrastructure,
operational efficiency,
and authentic human relationships.
Because despite all the conversations about AI, automation, and scale… wealth management is still a trust business. Always has been. Always will be.
Ironically, the very first speaker at NEXT25 may have framed the entire conference best. Hall of Fame basketball coach John Calipari said the secret to winning was earning his players' trust and proving to them that it mattered above all else. Different profession. Same business..
And maybe that was the real takeaway from NEXT25. The sharks aren’t looking for products anymore. They’re looking for partners they can trust.
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.
You should receive a confirmation email shortly. Don’t forget to reserve your room through the unique Sowell hotel reservation page. You can extend your stay at the Sowell Summit reduced room rate.
WEEK AHEAD
May 11-15, 2026
The Sentiment Gap – Nothing Matters But Bits & Barrels
There is a particular kind of giddiness that settles over Wall Street when the technologists and the diplomats decide, however briefly, to pull in the same direction. It is a spirit of "bounded optimism"—the sense that while the world is still a messy place filled with fractious nation-states, the plumbing of our future is being laid with remarkable speed.
This week, the markets didn't just climb; they exhaled. The S&P 500 rose 2.36% to a record 7,398.93, while the Nasdaq Composite surged 4.52%. Yet, look beneath the surface of these indices, and you’ll find a landscape as divided as a 19th-century map of the Balkans. This was a narrow, high-octane rally fueled almost exclusively by the digital architects of the AI age. Across the street, the U.S. Treasury market found a rare moment of serenity; yields softened after an early-week spike, with the 10-year Treasury slipping to 4.38%, as the "geopolitical risk premium" evaporated like morning mist over the Potomac.
The Catalyst: Diplomacy and the Digital Loom
The week’s primary engine was a rare alignment of geopolitical cooling and silicon heating. For months, the specter of a closed Strait of Hormuz had acted as a tax on global growth. But with an Iran peace deal nearing, the "war premium" vanished. WTI Crude collapsed from $104 to $94.6 per barrel—a move that sent Energy stocks tumbling 5.47%. In the strange alchemy of modern markets, peace in the Middle East was a bearish signal for oil rigs but a bullish one for everything else.
Simultaneously, we are witnessing the "Earnings Epiphany." We are currently reliving the Great Build-out of the mid-90s, but with significantly better balance sheets and foundation. In 1995, we were laying fiber-optic cables for a revolution we couldn't yet define. Today, we are stacking HBM (High Bandwidth Memory) for an intelligence we are only beginning to converse with.
The rise of the internet was defined by speculative "eyeballs" and the frantic wiring of the world. Today’s AI boom is more industrial. It is a capex-heavy era where profitable titans are building a digital loom. The Mag-7 had a formidable run—NVIDIA gained 8.4%, and Apple rose 4.7%—but the true pyrotechnics were found in the PHLX Semiconductor Index, which gained a staggering 11.1%. Memory and chip names went vertical: Micron surged 37%, SanDisk 31%, AMD 26%, and Intel 25%. We aren't just clicking links anymore; we are building the cognitive infrastructure of the next century.
Sector
Performance
Narrative
Technology / Semis
+11.1% (SOX)
The insatiable appetite for AI infrastructure.
Financials
-1.1%
Dragged down by a flattening yield curve and regulatory uncertainty.
Utilities
-3.6%
High-yielding "bond proxies" lost luster as growth took center stage.
Energy
-5.47%
The victim of a looming peace deal and $94 oil.
The Two-Track Economy: Factories vs. Feelings
If you read the University of Michigan Consumer Sentiment report, you’d think we were living through a Dickensian winter. Sentiment plunged 3.2% to a record low of 48.2, as families feel the persistent pinch of high prices. And yet, the "hard data" tells a story of a manufacturing and labor engine running at full throttle.
We are seeing a "sentiment gap." The consumer is grumpy, but the economy—buoyed by the massive AI buildout—is profoundly sound.
The Fed: Continuity in the Constitutional Fog
In Washington, the air is thick with speculation as the Senate moves to confirm Kevin Warsh as Fed Chair before Jerome Powell’s term concludes on May 15th. The cocktail party chatter centers on whether Warsh will be a White House puppet or a guardian of the dollar.
But markets crave continuity over drama. With Warsh, a former Fed governor, and Jerome Powell staying on as a Fed Governor until 2028, the FOMC's institutional memory remains intact. This is a committee of twelve, not a solo act. The yield curve flattened slightly this week as markets processed this stability, with two-year yields ticking up to 3.895%. Despite the solid data, the Bloomberg rate probabilities show a growing, if still hesitant, belief that a cut might finally be on the horizon as inflation tailwinds from lower oil prices take effect.
Looking toward the week ahead, the market’s focus will shift from the geopolitical stage to the cold, hard mathematics of the American checkbook. We await the arrival of the CPI and Core CPI data, followed closely by PPI and Core PPI; these are the twin pillars upon which the Fed’s next move rests. With energy prices cooling, the headline figures may offer a reprieve, but it is the "stickiness" of the core numbers that will reveal if our current prosperity is truly non-inflationary. We will also look to Industrial Production and Capacity Utilization for confirmation that the AI-led factory boom isn't just a digital mirage but a physical reality.
“The President, as you might know, much like virtually all presidents either I’ve known or studied, presidents tend to be for cutting rates. I think the difference is President Trump expresses it quite publicly without surrogates or subterfuge, but Presidents want lower rates. But Fed independence is up to the Fed.”
— Fed Chair Nominee Kevin Warsh, Senate Banking Confirmation Hearing, April 26, 2026.
NEXT25: The Sharks Aren’t Looking for Products Anymore
By Gregory Lai, CFA
At NEXT25, we hosted a Shark Tank-style panel where investment firms pitched their ideas while Alex Hsiao and I fired questions from beneath our Shark hats.
On the surface, it was entertaining. Underneath, it revealed something much bigger happening across the wealth management industry. The sharks aren’t really looking for products anymore, at least not in the old sense.
Ten years ago, a great pitch often centered on performance numbers, back-tests, factor exposure, or some version of “we outperform the benchmark.”
That world still exists.
But the questions advisors ask today are different:
That’s a fundamentally different industry conversation, and honestly, probably a more mature one. You could feel this shift throughout the NEXT25 Summit.
Nearly every session — whether focused on AI, cybersecurity, advisor partnerships, or portfolio construction — pointed toward the same underlying reality: wealth management is professionalizing at an accelerated pace. Or at minimum, as Patrick Hannon of Fidelity suggested, advisors are finally starting to take better notes.
The independent advisor of today increasingly resembles the CEO of a sophisticated operating company.
They are managing:
That’s no longer a small-business lifestyle practice. That’s enterprise management. Ironically, the more complex the industry becomes, the more valuable simplicity becomes.
That may have been the hidden theme of the entire conference. The firms generating the most interest weren’t necessarily the ones with the most complicated solutions. They were the ones that reduced friction.
The firms that could help advisors:
In many ways, this is what OCIO has quietly become. Not outsourcing. Infrastructure. That distinction matters..
The best advisors don’t want to hand over their client relationships. They want partners who strengthen those relationships.
That’s a very different value proposition than the asset management world historically understood.
There was another interesting undercurrent at NEXT25 as well: realism. Not fear. Though former Navy SEAL David Rutherford certainly brought some intensity. Not euphoria. Dr. Jason Hsu made a compelling case for long-term optimism. Just realism.
Or perhaps slight paranoia after hearing Morgan Stanley cybersecurity expert Rachel Wilson discuss cyber risk in an increasingly uncertain world. Most people in the room understand markets have changed. Concentration risk is higher.
Passive indexing increasingly means concentrated indexing, as Michael Green’s work demonstrates. Technology disruption is accelerating.
Clients expect faster communication and deeper customization. The operational burden on advisors keeps growing.
And AI — whether people fully admit it yet or not — is beginning to force every firm to reconsider how work gets done. Which means the winners in the next decade probably won’t be determined solely by who has the best investment products.
The winners may be the firms that best combine:
Because despite all the conversations about AI, automation, and scale… wealth management is still a trust business. Always has been. Always will be.
Ironically, the very first speaker at NEXT25 may have framed the entire conference best. Hall of Fame basketball coach John Calipari said the secret to winning was earning his players' trust and proving to them that it mattered above all else. Different profession. Same business..
And maybe that was the real takeaway from NEXT25. The sharks aren’t looking for products anymore. They’re looking for partners they can trust.
Advisory services offered through Sowell Management, a Registered Investment Advisor. The views expressed represent the opinion of Sowell Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and non-proprietary sources that have not been independently verified for accuracy or completeness. While Sowell Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and Sowell Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. Past performance is not indicative of future results.