Morning Dose #244: CPI Day: The Rally’s Make-or-Break Moment – Friday 4/10/2026

Situation Awareness

Today’s Market Narrative

Equity futures are indicating a flat start this morning as the market braces for the March CPI report. Yesterday, the major averages extended their gains, buoyed by optimistic developments on the geopolitical front, specifically the ongoing ceasefire between the U.S. and Iran. However, caution remains as passage through the Strait of Hormuz is reportedly still restricted, keeping oil prices elevated around $98 per barrel for WTI crude. Investors are now shifting their focus to economic data, with the CPI report serving as a critical test of whether inflation is broadening beyond energy.

The performance of Asian-Pacific equity markets offered a mixed picture to start the day. Japan’s Nikkei rose 1.8%, while Hong Kong’s Hang Seng increased by 0.6%. However, China’s Shanghai Composite posted a gain of 0.5%. The Bank of Korea held its policy rate steady at 2.50%, raising concerns about the potential for higher prices and slower growth related to the U.S.-Iran conflict indicating global anxiety about increasing prices. European equities, following Asia’s lead, are aiming to close the week on a positive note, suggesting some underlying risk appetite despite the uncertainty.

The market’s direction today depends on the CPI data; A hotter-than-expected reading could trigger a hawkish repricing of Fed policy expectations, while a cooler reading could fuel a continuation of the risk-on rally. Sector rotation will likely be influenced by the inflation data as well, with defensive sectors potentially outperforming if inflation concerns intensify. The technology sector may see continued momentum, driven by ongoing AI developments, though this could be tempered by broader market sentiment.

Macro & Policy

The market’s current focus is squarely on the March CPI report, particularly the core reading, as it will provide crucial insights into underlying inflation trends and, consequently, the Federal Reserve’s policy outlook. Treasury yields were little changed yesterday during the relief rally in equities, potentially due to concerns about deficit spending related to the ongoing geopolitical tensions.

With oil prices remaining elevated due to continued restrictions in the Strait of Hormuz, inflation concerns persist. The forward twelve-month earnings estimate for the S&P 500 was $329.02, with the S&P 500 down 7% in the interim. Geopolitically, while a ceasefire between the U.S. and Iran is holding, its sustainability remains a key concern, contributing to market apprehension. The U.S. Dollar Index is down 0.1% at 98.76.

Economic Calendar Today

• 08:30 ET: CPI for Mar — Expected: 0.7% | Prior: 0.3% — A higher-than-expected reading could trigger a hawkish Fed response.
• 08:30 ET: Core CPI for Mar — Expected: 0.3% | Prior: 0.2% — This is the key number; a hotter core reading suggests inflation is broadening.
• 10:00 ET: Factory Orders for Feb — Expected: 0.5% | Prior: 0.1% — Provides insight into manufacturing activity, a key economic indicator.
• 10:00 ET: Univ. of Michigan Consumer Sentiment – Prelim for Apr — Expected: 52.0 | Prior: 53.3 — Indicates consumer confidence, impacting spending trends.
• 14:00 ET: Treasury Budget for Mar — Expected: -$160.0B | Prior: -$307.5B — Provides a snapshot of government finances.
• Earnings reporting today (pre/post market): No significant earnings releases today given last several days.
• No Fed speakers or scheduled Treasury auctions today, keeping the focus on economic data.

Earnings & Corporate News

Taiwan Semiconductor Manufacturing (TSM) reported March revenues increased 45.2% year-over-year, and Q1 revenues were above consensus. TSM gapped up 2.3% on this news. Tesla (TSLA) sales in China fell 16% in Q1, according to Electrek. Tecnoglass (TGLS) reaffirmed 2026 revenue guidance but adjusted EBITDA guidance following the recent U.S. aluminum tariff update. These earnings reactions are influencing sector rotations, with tech benefiting from strong results and materials bearing the brunt of tariff concerns.

Several notable analyst ratings were issued. Artivion (AORT) was upgraded to Buy at Ladenburg, targeting $42. Shake Shack (SHAK) was upgraded to Outperform at Mizuho, targeting $120. Nike (NKE) was downgraded to Neutral from Overweight at Piper Sandler, targeting $50. The reactions to these ratings are mixed, likely influenced by broader market sentiment and sector-specific factors. BayCom (BCML) was downgraded to Neutral from Buy at Brean Capital.

Eni S.p.A. (E) is investing $70 million in Nouveau Monde Graphite. Ovintiv (OVV) closed the sale of its Anadarko assets for $3 billion. Transcat (TRNS) is acquiring SCM Metrology and Laboratories S.A. for approximately $13 million. These M&A activities are creating some stock-specific opportunities.

WaveFinder Signal Summary

Today’s scan environment presents a cautious picture. The Reversal and D9M scans are generating the most signals, but with data unavailable, the utility of these signals is limited. However, there is a substantial number of reversal signals, indicating overbought conditions in a tape that has been moving higher, suggesting there are tactical opportunities if volatility increases.

The percentage of stocks trading above their 40-day SMA rose slightly to 56.06% indicating cautious bullishness, with a slight broadening of market participation. However, with the 20 SMA decreasing significantly, the setup is much less bullish in the near term. Key setups to watch include names from the Delayed 9M scan, pending the CPI data release.

Today’s Watchlist

• TLX — FDA accepted new drug application, potential breakout.
• OGN — Acquisition offer boosts shares, watch for follow-through.
• TSM — Reported strong revenues, potential for continued upside momentum.
• AEHR — D9M signal points to potential continuation of upward trend.
• AGX — shows 2LYNCH setup, breaking range.
• SHAK — Upgraded by Mizuho, watch for a gap up and strong open.

Action Codes of the Day

CRT Controlled Risk Taking — With the market awaiting CPI data and geopolitical tensions still present, taking carefully calculated risks is prudent. Many sectors are showing declining ATR, indicating increased risk during choppy session.
BTFD Buy The Dip — Markets bullish long-term but overbought, wait for strong signals as inflation data comes in.