Situation Awareness
Situation Awareness: Cautious. Mixed signals abound as earnings season continues with mega-cap reports due after the close. Trade mode: selective and defensive. Investors are awaiting the FOMC decision and parsing a deluge of earnings while geopolitical tensions in the Middle East remain elevated. Regime context — 71.16% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 0 bulls vs. 0 bears. The 5-day trend shows a flat sequence, signaling consolidation.
SIP: CTSH SOFI TEVA ADP
- What’s working: Strong earnings beats are being rewarded, but disappointing guidance is heavily penalized.
- Leading sectors: Financials (2.23), Industrials (1.26), Energy (1.05).
- Key event: Investors will closely watch the FOMC decision and subsequent commentary for clues on potential rate cuts or hikes.
- Market read: Yesterday’s tape showed weakness in tech and mega-caps after a strong run, suggesting profit-taking and rotation into defensive sectors.
- DEP watchlist: CNC RIG AMD ASX
- SIPS: NUE NBR DXPE STLD
Today’s Market Narrative
Equity futures suggest a mixed open as the market digests a massive wave of earnings reports and anticipates the afternoon’s FOMC decision. Yesterday’s session saw profit-taking in semiconductor names and broader weakness in mega-cap stocks, preventing the SPY and QQQ from reaching new record highs. S&P 500 Futures are down -1, DJIA Futures are down -22, while Nasdaq Futures are up +70.
Earnings remain a primary driver, with investors assessing a wide range of reports this morning and bracing for results from key “magnificent seven” companies after the close. Additionally, geopolitical tensions are contributing to market uncertainty. The Wall Street Journal reported that President Trump is considering an extended blockade of Iran, causing WTI crude to surge $3.40 (+3.4%) to $103.33 per barrel. Energy sector is capturing the widest gain as crude oil futures settle $3.56 higher (+3.7%) at $99.95 per barrel.
Overseas markets showed mixed performance. Asian equities closed mostly higher, with Hong Kong’s Hang Seng rising 1.7% and China’s Shanghai Composite gaining 0.7%. However, major European indices are trading in the red, with the STOXX Europe 600 down -0.4% and the U.K.’s FTSE 100 declining -0.8%.
Macro & Policy
The market is focused on this afternoon’s FOMC decision. While the Fed is widely expected to hold rates steady in the 3.50-3.75% range, the key will be Chairman Powell’s commentary. Investors will be scrutinizing his remarks for any shift in tone regarding the recent surge in oil prices and its potential impact on inflation, which could influence expectations for future rate cuts or even revive the possibility of a rate hike.
In the bond market, U.S. Treasuries are poised for a slightly lower start. The 10-year note yield is at 4.36%. Overnight data indicated an acceleration in Australia’s CPI, while Spain’s CPI came in cooler than expected. The U.S. Dollar Index is up 0.1% at 98.69.
Economic Calendar Today
- 07:00 ET: MBA Mortgage Applications Index for Apr 25 — Prior: 7.9% — An indicator of housing market activity and interest rate sensitivity. The index decreased -1.6% from a prior increase of 7.9%.
- 08:30 ET: Housing Starts for Feb/Mar
- 08:30 ET: Building Permits for Feb/Mar
- 08:30 ET: Durable Orders for Mar — Briefing.com Consensus 0.5%; Prior -1.4% — A measure of manufacturing activity and business investment.
- 08:30 ET: Durable Goods ex-transportation for Mar — Briefing.com Consensus 0.6%; Prior 0.8%
- 10:00 ET: New Home Sales for Feb/Mar
- 10:30 ET: EIA Crude Oil Inventories for Apr 25 — Prior +1.93M — Affects oil prices and energy sector stocks.
- 14:00 ET: FOMC Decision for Apr — Briefing.com Consensus 3.50-3.75%; Prior 3.50-3.75% — Sets the tone for monetary policy and influences market sentiment.
Earnings & Corporate News
Earnings reports are dominating the landscape this morning. Seagate Technology (STX 684.40) jumped +18.20, after beating EPS estimates by $0.59, exceeding revenue expectations, and providing Q4 EPS and revenue guidance above consensus. Starbucks (SBUX 102.29) gained +5.2% after surpassing EPS expectations by $0.07 and revenue forecasts, and raising its FY26 EPS and global comparable sales growth guidance. Visa (V 327.00) also rose +5.7% on a $0.21 EPS beat and revenue outperformance.
Conversely, Cognizant Tech (CTSH 55.12) is down -0.92, with Q2 revenue guidance below estimates. SoFi Technologies (SOFI 18.36) also reported Q2 revenue guidance below estimates. Brown-Forman (BF.B) was downgraded to Underweight from Neutral at JPMorgan, with a $23 target. NeoGenomics (NEO) was upgraded to Outperform from Market Perform at Leerink Partners, target $25.
WaveFinder Signal Summary
The scan environment is moderately active with 72 continuation signals and 82 delayed 9M signals. However, the market breadth is narrowing. Only 21% of stocks trade above their 20-day SMA, down from 38% yesterday, suggesting weakening short-term momentum. The D9M screen highlights bottoming setups, with CNC and RIG showing potentially strong reversal candidates.
Today’s Watchlist
- CTSH — Q2 sales guidance below estimates. A short opportunity if it breaks below intraday support.
- SOFI — Q2 revenue guidance below estimates. This name is trading down, opportunity to play the downside.
- TEVA — Better-than-expected Q1 results. A long opportunity if this name breaks out above resistance.
- VMC — Better-than-expected Q1 results. Look for follow-through buying.
- RIG — Delayed 9M signal suggesting a possible bottom. A long opportunity.
- NUE — Continuation breakout setup in the metals sector. Watch for bullish momentum.
Action Codes of the Day
CRT Controlled Risk Taking — With mixed signals and high earnings volatility, calculated risks and tight stops are essential.
T3A Think 3 Days Ahead — FOMC decision implications will reverberate for days, so manage risk accordingly.