Stocks closed mixed yesterday, but this time it was the S&P and Nasdaq in the green, while the Dow, the small-cap Russell 2000, and the mid-cap S&P 400 were in the red.

Yesterday morning, Federal Reserve Governor, Michelle Bowman, said it was not quite time to start lowering rates. Specifically, she said, "we are still not yet at the point where it is appropriate to lower the policy rate." But she acknowledged, "should the incoming data indicate that inflation is moving sustainably toward our 2 percent goal, it will eventually become appropriate to gradually lower the federal funds rate to prevent monetary policy from becoming overly restrictive."

But she went on to say that there are a "number of upside risks," and that she will "remain willing to raise the target range for the federal funds rate at a future meeting should progress on inflation stall or even reverse."

Unclear how the market took those comments as Tuesday's session was mixed just like Monday's. But her comments weren't unlike what some other policymakers have said recently. So there was no shock there.

What the markets are probably waiting for is Friday's Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge). Another report that shows inflation heading back down, like the better-than-expected CPI and PPI reports from two weeks ago, could eventually allow the Fed to cut rates sooner rather than later. Although, nobody is expecting anything until September at the earliest, and more likely November or December.

In other news, the Chicago Fed National Activity Index improved to 0.18 vs. last month's -0.26 and views for -0.40. The 3-month average, however, slipped to -0.09 vs. last month's -0.05 print.

The Case-Shiller Home Price Index came in at 1.4% m/m (unadjusted) vs. last month's 1.6%. On a y/y basis it was at 7.2%, down from last month's 7.5%, but up vs. estimates for 7.0%.

The Richmond Fed Manufacturing Index declined to -10 vs. last month's 0, and the consensus for 2.

And Consumer Confidence eased to 100.4 from last month's 101.3, but topped expectations for 100.0.

Today we'll get MBA Mortgage Applications, New Home Sales, the EIA Petroleum Status Report, and the Survey of Business Uncertainty.

Many of the chip stocks were up yesterday, erasing the losses racked up on Monday. But plenty are still down from last week's highs, and specifically Thursday's downside reversal for NVIDIA.

Whether this pullback means anything, or if it's just like any other run-of-the-mill pullback that ultimately ushered in new highs is yet to be seen. But taking out last week's high will quickly answer that question.

Either way, the AI boom which has sent tech stocks soaring, is far from over.

But it sure would be nice to see a bit of rotation in the markets and broaden this rally out. (I'm talking about you small-caps.)

See you tomorrow,