Market Snapshot: Rotation Cools Tech Highs and Drives Cyclical Gains

## Overview and Mission The Federal Reserve, often called the "Fed," is the central bank of the United States, established by Congress in 1913 to provide the nation with a safer, more flexible, and stable monetary and financial system[1]. Its mission centers on a dual mandate from Congress: to promote maximum employment and maintain price stability, ensuring the dollar retains its value over time[1]. The Fed operates through a unique hybrid structure, combining a national Board of Governors in Washington, D.C., with 12 independent regional Reserve Banks, including institutions like the Cleveland Fed[1]. This decentralized setup allows the Fed to closely monitor economic conditions across diverse regions, industries, and communities, while maintaining independence from short-term political influences[1]. ## Key Functions The Fed’s responsibilities are broad and vital to the U.S. economy. It conducts monetary policy—primarily by influencing interest rates—to achieve its employment and inflation goals[2]. The Fed also supervises and regulates banks to ensure the safety and soundness of the financial system, works to minimize systemic risks, and fosters efficient payment and settlement systems[2]. Additionally, it promotes consumer protection and community development, addressing emerging issues through research, supervision, and enforcement of consumer laws[2]. ## History and Evolution The Federal Reserve is the third central bank in U.S. history, following two failed attempts in the 19th century[1]. Its creation was a response to the financial turbulence of the early 20th century, aiming to prevent crises and stabilize the economy. Over time, the Fed has evolved, adopting more transparent and inclusive policymaking processes. For example, it now conducts regular reviews of its monetary policy framework, engaging with academics, businesses, and the public to refine its strategies and communications[3][5]. ## Recent Developments and Achievements In 2025, the Fed completed its second major review of its monetary policy strategy, tools, and communications, reaffirming its commitment to transparenc

**Nasdaq** (National Association of Securities Dealers Automated Quotations) is a premier American stock exchange, recognized as the second-largest globally by market capitalization and the first fully electronic stock market. Founded in 1971 and headquartered in New York City, Nasdaq revolutionized trading by introducing an automated, transparent, and efficient platform, setting a technological benchmark for global financial markets[1]. Nasdaq operates as both a stock exchange and a technology company through its parent, Nasdaq, Inc., which also owns multiple other U.S. and Nordic exchanges. It hosts over 4,000 listed companies, including prominent technology giants, foreign firms primarily from China and Israel, and a broad range of industries. Its indices, notably the Nasdaq Composite and Nasdaq-100, are key barometers of technology sector performance and innovation trends[1]. Historically, Nasdaq's achievements include pioneering electronic trading systems, leading market innovations such as the Advanced Computerized Execution System (ACES), and continuously enhancing market accessibility and liquidity. Its fully electronic model has driven high trading volumes, making it the most active U.S. stock market by volume. Nasdaq also plans to expand trading hours to 24 hours a day, five days a week, pending regulatory approval as of early 2025[1]. In recent years, Nasdaq has demonstrated robust financial growth; Q1 2025 earnings showed a 12.5% revenue increase year-over-year to $1.2 billion, with its solutions business growing 11%, reflecting strong demand for market technology and data services. The annual recurring revenue reached $2.8 billion, indicating solid future revenue visibility[2]. Nasdaq continues to benefit from megatrends such as artificial intelligence commercialization, semiconductor industry leadership, and cloud infrastructure expansion, which dominate the growth narrative on its platform[5]. Overall, Nasdaq remains a cutting-edge financial market hub that blends technology innovation with capital market leadership, serving as a vital engine for global busines

Broadcom Inc. is a leading American multinational company specializing in the design, development, manufacturing, and supply of a broad range of semiconductor and infrastructure software products. Its offerings serve diverse markets, including data centers, networking, broadband, wireless, storage, and industrial sectors. Headquartered in Palo Alto, California, Broadcom is recognized as part of the elite group of Big Tech companies and, since December 2024, became the 12th company to surpass a $1 trillion market capitalization, maintaining this status as of September 2025[1]. The company’s history traces back to the merger of Avago Technologies Limited and Broadcom Corporation in 2016, with Avago adopting the Broadcom name and ticker symbol (AVGO). Initially named Broadcom Limited, it rebranded to Broadcom Inc. in 2017. Broadcom has grown through strategic acquisitions, most notably acquiring VMware in November 2023 in a $69 billion cash-and-stock deal, expanding its footprint in infrastructure software and cloud computing[1]. Broadcom’s financial performance in 2025 reflects robust growth driven by the AI boom. In Q3 FY 2025, the company reported record revenue of $16 billion, a 22% year-over-year increase, fueled by a 63% surge in AI semiconductor revenue to $5.2 billion and strong VMware software sales. Semiconductor products accounted for 58% of revenue, with infrastructure software comprising 42%[2][6]. The company excels in custom AI accelerators, networking platforms like Tomahawk 6 and Jericho 4, and software solutions such as VMware Cloud Foundation, positioning it at the forefront of AI infrastructure[2][3]. Broadcom is noted for its high profitability, with net income margins around 32% and EBITDA margins near 54%, reflecting operational efficiency amid rapid revenue growth. It maintains strong investor confidence, backed by 14 consecutive years of dividend growth and favorable analyst ratings, despite concerns over valuation and