Situation Awareness: Cautious. Crude is calling the shots — WTI is +$2.23 at $93.72, its highest since early June, after a weekend exchange of strikes between the U.S. and Iran, and that oil surge is dragging equity futures lower even as semis hold firm. The tape splits down the middle: S&P futures -15 at 7,707 and Dow futures -374 at 53,066, but Nasdaq futures buck the trend +41 at 29,606 on chip strength. Index cash prices and SMA levels are unavailable in today’s data, so lean on futures and breadth. Trade mode: selective and defensive — respect the oil-driven risk-off in cyclicals while chip momentum stays intact. This is a wait-and-see week ahead of Thursday PPI, Friday CPI, and the Sept 15-16 FOMC, where markets price ~60% odds of a 25bp rate HIKE. Regime context — 50.03% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 206 bulls vs. 104 bears. The 5-day trend firmed, with breadth above the 20-SMA jumping to 23% from 19% and the 40-SMA edging up to 50.03% from 49.05%, signaling a grinding, choppy recovery rather than clean momentum.
SIP: ASAN CURV TYRA BBCP
- What’s working: Continuation/2LYNCH is the only rich scan with 11 signals, concentrated in memory/semis; Reversal fired just 1 (OXY). D9M is empty — no episodic pivots to chase.
- Leading sectors: market closed, no live trending or sector-ATR data available. Signal concentration points to COMPUTER (memory) and ELECTRNCS leadership from the continuation scan.
- Key event: U.S.-Iran strikes over the weekend pushed crude to a June high; Strait of Hormuz risk premium is the dominant macro force today.
- Market read: last week closed volatile-but-flat (S&P +0.1%, Nasdaq +0.4%, DJIA -0.3%); Friday’s hot jobs report tilted rate odds hawkish. Expect the same tug-of-war — oil and yields vs. semis.
- DEP watchlist: no D9M signals today — default to continuation leaders SNDK, MU, WDC.
- SIPS: SNDK ($1,740, +11.9%), MU ($1,016.59, +6.1%), COHR ($281.86, +6.6%).
Today’s Market Narrative
The story this morning is simple: oil is back in the driver’s seat. A weekend exchange of strikes between the U.S. and Iran reignited Strait of Hormuz fears, sending WTI crude up $2.23 to $93.72 — its highest level since early June. That single-commodity shock is pressuring the broad tape, with S&P 500 futures down 15 points at 7,707 and Dow futures off a heavy 374 points at 53,066. The Dow’s underperformance tells you where the pain sits: economically sensitive cyclicals and rate-sensitive names, not tech.
The critical divergence is Nasdaq futures, which are actually higher by 41 points at 29,606. Semiconductors are once again the market’s shock absorber. This mirrors last week’s script almost exactly — the PHLX Semiconductor Index gained 2.3% on the week even as software cratered (the expanded tech-software ETF fell 4.5% after a string of ugly post-earnings reactions). NVIDIA, Dell, and the memory complex carried the load then, and the continuation scan is telling us the same names are leading now, with SanDisk (SNDK +11.9%) and Micron (MU +6.1%) both flashing 2LYNCH continuation setups.
Zoom out and the picture is a market caught between two forces. Rising crude and firm Treasury yields are the headwind; AI-driven semiconductor demand is the tailwind. Last week the major averages went nowhere despite enormous intraday volatility — the S&P closed +0.1%, the Dow -0.3% — a classic sign of a market digesting conflicting inputs rather than trending. Breadth is quietly improving underneath (50.03% above the 40-day, up from 49.05%; 23% above the 20-day, up from 19%), but this is a grind higher, not a breakout.
Overseas offered little comfort. Japan’s Nikkei fell 1.7% and most of Asia was lower despite decent data — China’s trade surplus beat and Japan’s Q2 GDP was revised up to 0.4%. Europe is flat-to-lower with political noise building: Germany’s AfD doubled its support in a weekend Saxony-Anhalt election, and the ECB is expected to hike Thursday. Add Canada’s fresh counter-tariffs taking effect and the macro backdrop skews defensive.
Macro & Policy
All roads lead to the Sept 15-16 FOMC, and the debate has flipped hawkish. The CME FedWatch tool now assigns roughly 60% odds to a 25bp rate HIKE to 3.75-4.00%, up sharply from 49.4% just before Friday’s employment report. That August jobs print was a shocker — nonfarm payrolls rose 162,000 versus a 45,000 consensus, unemployment held at 4.1%, and prior months were revised up. Under new Chair Kevin Warsh, the Fed has stripped away forward guidance and effectively told the market to think for itself. As our Big Picture piece frames it, if Friday’s CPI pushes hike odds decisively above 60%, the burden shifts to Warsh to explain standing pat — a credibility test given his repeated criticism of tolerating five-plus years of above-target inflation. Three officials already dissented in favor of a hike last meeting.
Treasuries are inching lower again, consistent with the hawkish drift. The 10-year yield sits at 4.80% (up 1bp), the 2-year is unchanged at 4.38%, and the long bond is at 5.26%. Yields rose six basis points last week to close at 4.78%, and the 4.80% level on the 10-year has been acting as resistance. Watch the $58 billion 3-year note auction at 1:00 PM ET for a demand read. The Dollar Index is soft, down 0.3% at 98.93, while gold pulled back hard, off $32.90 to $4,443.70 — a notable move given the geopolitical backdrop, suggesting the flows are rotating into oil and rate-driven trades rather than classic safe havens.
This week’s macro calendar is front-loaded with inflation risk: August PPI Thursday and CPI Friday, both landing right before the FOMC blackout resolves into the decision. Those two prints, more than anything else, will settle the hike-or-hold question. Until then, expect the tape to stay hostage to oil headlines and yield ticks.
Economic Calendar Today
- 6:00 AM ET (released): August NFIB Small Business Optimism — Actual 98.7 vs. 99.3 consensus, prior 99.8. A soft print that reinforces the cooling-sentiment narrative, though not market-moving on its own.
- 1:00 PM ET: $58 billion 3-year Treasury note auction — First supply test of the week; weak demand would pressure the front end and equities.
- 3:00 PM ET: July Consumer Credit — Consensus $11.3B, prior $14.2B. A read on consumer leverage; a big miss would feed the discretionary-weakness theme.
- Earnings today: UNFI (AM — beat by $0.08, missed on revs, added $200M buyback), ABM (AM — beat by $0.03, missed on revs), plus CASY, AVO, BRZE, and TTAN after the close.
- No scheduled Fed speakers; the real catalysts are Thursday PPI and Friday CPI. Light top-tier data today means oil and the auction drive the tape.
Earnings & Corporate News
The single-stock tape is loaded with biotech and M&A action. Roivant (ROIV) is the standout, gapping +23.6% (quoted 41.38, +18.47%) after its Phase 2 PHocus study of mosliciguat in PH-ILD met all endpoints. On the flip side, drug disappointments are punishing names hard: Novartis (NVS) is down 12.2% after its Phase III del-desiran study missed, Ionis (IONS) is off 12.2%, and Royalty Pharma (RPRX) is down 6.2% on a failed Novartis pelacarsen trial. Boston Scientific (BSX) warned a cyber incident will likely cause it to miss Q3 and FY26 guidance — a name to avoid until clarity emerges.
Intel (INTC 100.25, +4.7%) is a bright spot, higher on reports of potential price increases and an upgrade to Outperform at Northland with a $120 target. M&A is busy: GE Aerospace (GE) agreed to acquire Consolidated Precision Products for $11.75 billion, and WaFd (WAFD +1.9%) struck a $3.9 billion reverse merger with EverBank, seeing 29% EPS accretion in 2027. Foxconn (HNHPF) reported August sales up 52% year-over-year — another AI-supply-chain data point supporting the semi/hardware bid.
On ratings, Morgan Stanley ran a sweeping regional-bank upgrade cycle (M&T, East West, Cullen/Frost, Flagstar, Commerce Bancshares all lifted), a constructive signal for financials. Airbnb was upgraded to Outperform at Raymond James ($200 target) and Synopsys to Overweight at Morgan Stanley ($500). Downgrades cluster in China tech — Baidu (BIDU -7.9%), JD, and PDD all cut at Arete — and defense/consumer names like Peloton (to Underweight, $4.50). From Friday’s reports, remember LULU broke below $100 for the first time in years on a second consecutive guidance cut, while DOCU held gains on accelerating IAM adoption.
WaveFinder Signal Summary
The scan environment is moderately constructive but narrow. The Continuation/2LYNCH scan is the only rich one, with 11 signals heavily concentrated in the memory and semiconductor complex — SanDisk (SNDK +11.9%, RVOL 1.3), Micron (MU +6.1%), Coherent (COHR +6.6%), and Western Digital (WDC +5.9%) all firing. That clustering confirms the Nasdaq-futures strength is real and tradeable, not a headfake. The Reversal scan produced just one name, OXY ($60.04, -0.9%) in energy, and Delayed 9M is empty — meaning no episodic pivots to chase and no MAGNA53 setups today.
Breadth is expanding modestly: 50.03% of stocks above the 40-day SMA (up from 49.05%) and a sharper move to 23% above the 20-day (from 19%). That’s a positive divergence against a down-futures open — the internals are healing even as the headline indices wobble on oil. But with only one truly rich scan and D9M dry, this is a stock-picker’s tape, not a broad-participation buy signal. Lean into the semi leaders, stay light everywhere else.
Today’s Watchlist
- SNDK — Memory 2LYNCH continuation at $1,740, +11.9% with RVOL 1.3; leading the strongest scan group into a chip-led Nasdaq.
- MU — Micron +6.1% at $1,016.59, second-strongest continuation signal; the AI-memory demand story keeps compounding.
- INTC — $100.25, +4.7% on price-hike reports and a Northland upgrade to $120; watch for a hold above $100.
- OXY — Only reversal signal ($60.04) and a direct oil-spike beneficiary with crude at a June high; energy is the day’s macro tailwind.
- ROIV — Gapping +23.6% on a Phase 2 success; momentum name for those who trade biotech catalysts, but respect gap volatility.
- GE — $11.75B CPP acquisition; industrials are under pressure from oil, but the deal is a strategic positive to track.
Action Codes of the Day
- CRT (Controlled Risk Taking) — With 50.03% above the 40-day and a split tape (Dow futures -374, Nasdaq futures +41), take calculated risks only in the confirmed leaders like SNDK and MU; size down in cyclicals.
- FHP (First Hour Pass) — Oil-driven gap down plus a hawkish rate backdrop ahead of Thursday PPI and Friday CPI argue for letting the open settle before committing; let the market show its hand.