The Federal Reserve proved successful in reaffirming its dovish credentials for financial markets. Treasury bond yields fell alongside the US Dollar while anti-fiat gold prices rose in the aftermath of the latest policy announcement from the steering FOMC committee and the subsequent press conference with Chair Jerome Powell. Worries about earlier-than-expected tightening amid quickening reflation appeared to ease.

This is as good news continued to pour in on the corporate earnings front. The lion’s share of the day’s announcements bested analysts’ forecasts, extending a generally positive first-quarter reporting season. With nearly half of the S&P 500 companies’ releases now in the history books, bottom-line results have beat out expectations by 26.2 percent on average.

Against this backdrop, it seems somewhat puzzling that stocks did not perform better than they did. All three major US equity benchmarks finished the Wall Street session in the red. That equities were unable to capitalize despite robust results from corporate America and a Fed promise of loose financial conditions that the investors clearly found credible may speak to significant underlying weakness.

More interestingly still, the blue-chip Dow Jones Industrial Average lagged the tech-heavy Nasdaq, suggesting the Fed’s promises of accommodation registered as rotation toward riskier, more rate-sensitive names. Nevertheless, technology names led losses today, shedding nearly a full percentage point. Financials managed gains despite seemingly slim prospects for an expansion of lending margins.

This further clash with incoming news-flow may offer a view to the thrust behind any would-be selloff that might be brewing on the horizon. The operative narrative has been that broadening vaccination will unlock pent-up demand sidelined by Covid-linked restrictions even as generous fiscal stimulus amplifies growth while the Fed remains sidelined. A round of profit-taking on related bets may be due.