Morning Market Pulse: Trump’s Marijuana Rescheduling and AI Policy Shifts

The pre-market tone is cautiously optimistic as investors digest Trump’s marijuana reclassification plans and the Fed’s rate-cut signals. Commodity futures show mixed signals: WTI crude oil edges up 0.27% to $55.96, while gold, copper, and silver fall by 0.44%, 0.50%, and 1.00%, respectively. The greenback’s strength and geopolitical tensions are weighing on metals, but energy markets remain resilient.

With Trump’s AI executive order and potential policy-driven market moves, today’s key stories could shape risk appetite ahead of the open.

1. Trump’s Marijuana Rescheduling and AI Executive Order

President Trump’s plan to reclassify marijuana from Schedule I to Schedule III could unlock billions in medical and recreational markets. The AI executive order, meanwhile, aims to balance innovation with oversight, potentially boosting tech stocks like NVDA and TSM. Analysts note this could spur short-term volatility in cannabis and AI sectors, with Medicare pilot programs adding a wildcard for pharma and biotech.

2. Waller’s Rate-Cut Signals

Federal Reserve Governor Christopher Waller’s comments that the Fed still has room to cut rates in 2024 have eased bond market fears. With inflation showing signs of moderation, investors are pricing in a 75% probability of a 25-basis-point cut by Q3. This could support growth stocks and high-yield bonds, though hawkish dissenters at the Fed remain a risk.

3. Nvidia’s Interview Withdrawal

NVDA’s abrupt cancellation of a Fox Business interview has raised questions about its communication strategy amid regulatory scrutiny. While the company’s Q1 beat ($13.64B revenue) is a positive, the timing of the interview withdrawal—amid Magnificent Seven volatility—could test investor confidence in its AI-driven growth narrative.

4. Coinbase’s Expansion into Stocks and Prediction Markets

COIN’s foray into traditional finance with stocks and prediction markets signals a broader crypto-to-finance shift. This could attract retail investors and institutional capital, but regulatory hurdles and competition from BATS and TDG remain key risks.

5. Trump’s Venezuela Oil Play

Talks of U.S. oil companies returning to Venezuela post-Maduro could boost energy stocks like CVX and MRO. However, geopolitical risks and sanctions enforcement complicate the timeline, with potential oil market ripple effects if the plan materializes.

6. Micron’s Earnings Beat

MU’s Q1 results ($13.64B revenue, $8.41B cash flow) highlight semiconductor demand resilience. The company’s cautious Q2 guidance reflects supply chain recovery, but AI chip shortages and inventory corrections could test margins.

7. Trump’s AI Policy and Bitcoin

The AI executive order’s focus on innovation governance has sparked debates about its impact on crypto. While some see it as a potential bottom for BTC, others warn of regulatory friction. Tech stocks like AMD and INTC could also face scrutiny under the new framework.

8. Coursera-Udemy Merger

CRSR’s halted shares signal a strategic pivot to AI education. The merger with UDMY aims to capture the $200B global e-learning market, but execution risks and competition from DLB and EDU could pressure the combined entity’s valuation.

9. RBC Upgrades Boston Scientific

BSC’s upgraded rating to $130 (Outperform) reflects strong medical device demand. With aging populations and AI-driven diagnostics, the stock could outperform if R&D pipelines deliver, but healthcare policy shifts remain a wildcard.

10. Japan-Indonesia Financial Pact

The bilateral agreement aims to boost regional trade and investment. While direct market impacts are limited, it signals a shift in Southeast Asian economic alliances, potentially benefiting JCI and TSM through supply chain diversification.

Ticker/Company Watchlist

• NVDA: Monitor regulatory scrutiny and AI guidance clarity.
• MU: Track Q2 demand for memory chips and AI infrastructure.
• COIN: Watch expansion execution and regulatory approvals.
• BSC: Focus on medical device innovation and Medicare coverage.
• CRSR: Assess merger integration and AI education demand.

Analyst Summary

Today’s market sentiment is a mix of cautious optimism and geopolitical jitters. Trump’s policy shifts and Waller’s dovish hints are fueling rotation into growth and tech, while energy and metals face headwinds from dollar strength. The Magnificent Seven’s resilience hinges on earnings clarity and regulatory outcomes, with NVDA and MU as key barometers. Investors are advised to balance AI optimism with macro risks, particularly in oil and emerging markets.

Upcoming Economic Highlights

This week’s calendar is packed with geopolitical and military developments: Trump’s Venezuela oil blockade, U.S. arms sales to Taiwan, and Russia-Ukraine peace talks could trigger market swings. The Fed’s January meeting and Q4 earnings season will also shape the narrative. Investors should brace for volatility as policy and conflict intersect.