Situation Awareness
Situation Awareness: Cautious. Market character is muted with a flattish opening expected due to stalled negotiations with Iran and ahead of a busy week of mega-cap earnings and the FOMC decision. Trade mode: neutral and watchful. The market is digesting recent record highs amidst geopolitical uncertainty and anticipation of key catalysts this week. Regime context — 71.07% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 118 bulls vs. 131 bears. The 5-day trend (data unavailable).
SIP: XOMA NE NOK MANE
- What’s working: M&A news and earnings beats are driving individual stock performance.
- Leading sectors: Technology (3.01), Financials (1.94), Industrials (1.67); leading themes: (Market closed — no live data)
- Key event: This week features mega-cap earnings from five of the “Magnificent Seven” and the April FOMC decision.
- Market read: Last week saw a market rebound to record highs driven by mega-cap strength fueled by easing geopolitical tensions. Today’s market is cooling off as tensions are rising again.
- DEP watchlist: INDI, MBLY, NVDL
- SIPS: ANTX, EME
Today’s Market Narrative
Equity futures suggest a muted open this morning, with the S&P 500 Futures up +3 at 7,198, DJIA Futures down -43 at 49,349, and Nasdaq Futures up +55 at 27,490. The primary driver early in the week is stalled negotiations between the U.S. and Iran, with President Trump indicating future talks will occur by phone and the IRGC boarding two container ships near the Strait of Hormuz.
Asian markets mostly closed higher, led by Japan’s Nikkei (+1.4%) and South Korea’s Kospi (+2.2%), while European indices are also starting the week on a positive note, with Germany’s DAX up +0.9% and France’s CAC 40 up +0.7%. Crude oil is trading higher, up +0.75 at $95.15, while gold is down -22.60 at $4,718.30.
The market is entering a critical period, with earnings reports from five of the “Magnificent Seven” on deck, including Amazon (AMZN), Microsoft (MSFT), Alphabet (GOOG/GOOGL), and Meta Platforms (META). This week also features the April FOMC decision, though the market is fully pricing in the Fed leaving rates unchanged.
Overall, the market seems to be taking a breather after last week’s record highs, driven by mega-cap and AI-related names. Uneven participation in the broader market signals a cautious underlying sentiment, with traders eyeing geopolitical developments and earnings results for further direction.
Macro & Policy
Geopolitical tensions surrounding Iran are weighing on sentiment, as stalled negotiations and Iranian actions in the Strait of Hormuz create uncertainty. Iran has offered a proposal to reopen the Strait of Hormuz, but wants to postpone nuclear talks, per Axios, which the U.S. may not accept. President Trump will hold a Situation Room meeting on Iran today.
The bond market is showing slight downward pressure, with the 10-year Treasury yield at 4.33%, up 2 bps on the day. The U.S. Treasury sold $69 billion in 2-year notes at auction, with a high yield of 3.812%, which tailed the when-issued yield by a tenth of a basis point. The auction met decent demand as the bid-to-cover ratio (2.65x) was above average (2.59x), although indirect takedown (56.5%), was a bit light relative to the prior 12-auction average (57.9%). The U.S. Treasury will also sell 5-yr notes at 13:00 ET as it looks to complete this week’s auction slate ahead of Wednesday’s FOMC Decision.
Economic Calendar Today
- No economic data of note on the calendar today. The market will focus on geopolitical developments and corporate news ahead of a busy earnings week and Wednesday’s FOMC decision. This lack of data may lead to lower volatility early in the session.
- Earnings reporting today (pre-market): DPZ, DEA, NE, VZ; (afternoon): ARE, AMKR, AMRZ, AVB, BBBY, BRX, BRO, CDNS, CLS, CINF, CDP, CR, CCK, CTOS, HLMN, KFRC, KRC, LC, NWBI, NOV, NUE, PSA, SANM, SSD, SUI, UHS, VTR — Verizon (VZ) beat EPS expectations but missed revenue and raised FY26 EPS above consensus, and Domino’s Pizza (DPZ) missed on both.
Earnings & Corporate News
Verizon (VZ) is up +3.2% after beating EPS expectations by $0.07, missing revenue expectations, and raising FY26 EPS guidance above consensus. In contrast, Domino’s Pizza (DPZ) is down -4.0% after missing EPS expectations by $0.14 and also missing on revenue figures. Eli Lilly (LLY) is set to acquire Ajax Therapeutics for up to $2.3 billion in cash. Meta Platforms’ (META) $2 billion purchase of Manus was blocked by China, according to the Financial Times.
Notable analyst upgrades include CrowdStrike (CRWD), upgraded to Outperform at Mizuho with a target of $520, and Nokia (NOK), upgraded to Buy from Hold at Argus, with a target of $15. Adobe (ADBE) was downgraded to Neutral at Mizuho, with a target of $270. Several firms initiated coverage on HMH Holding (HMH) with Buy ratings. Noble Corporation (NE) beat by $0.05 and reaffirmed guidance resulting in a higher share price.
WaveFinder Signal Summary
The scan environment shows a moderate number of signals, with 79 Continuation/2LYNCH signals and 59 Delayed 9M signals. The contraction of stocks above their 20-day SMA from 51% to 27% indicates a pullback is happening, but 71.07% of stocks still trade above their 40-day SMA. Volatility in the technology sector as shown by RSPT has increased significantly.
Top setups include ANTX from the Continuation scan due to its high percentage change and relatively low risk, and INDI from the Delayed 9M scan due to its high volume and attractive risk profile.
Today’s Watchlist
- VZ — Earnings & Higher Guidance. VZ beat EPS, raised guidance, and is gapping up, presenting a potential long setup.
- ANTX — Continuation breakout. Showing a strong continuation pattern on the scan warrants a look.
- NE — Better than expected earnings and reaffirmed FY26 guidance. Fleet dynamics and dayrates are trending positively and shares gapping up.
- INDI — Delayed 9M setup. High volume on a potential breakout in the chip space.
- QCOM — Open AI Smartphone processors. Qualcomm is rumored to be working with Open AI to develop smartphone processors,
Action Codes of the Day
- T3A: Think 3 Days Ahead — The upcoming FOMC decision and mega-cap earnings provide multiple catalysts over the next three days.
- CRT: Controlled Risk Taking — Geopolitical tensions and mixed earnings require a cautious approach to new positions.