Situation Awareness: Cautious — a narrow, mega-cap-led rally sitting on thin underlying breadth. The tape is being driven by two macro tailwinds: a sharp retreat in crude oil and easing Treasury yields, both feeding off diplomatic hope around Iran and the Strait of Hormuz plus constructive U.S.–China talks ahead of the September 24 Trump-Xi summit. S&P 500 futures sit +3 at 7,837, Dow futures +172 at 52,647, but Nasdaq futures are actually -10 at 30,775 after yesterday’s monster tech run — index cash levels and SMA structure are data unavailable this morning, so lean on the range read, not precise levels. Trade mode: selective and opportunistic — participate in leadership but respect that the move is concentrated. Today’s calls come from Trump’s 10:00 a.m. ET UN address, Gulf-state meetings on Iran, and the $69B 2-yr auction at 1:00 p.m. ET. Regime context — 23.86% of stocks trade above their 40-day SMA, and the 4% Bull/Bear gauge shows 140 bulls vs. 75 bears. The 5-day trend turned up, with % above the 20-SMA vaulting from 36% to 70% and breakdowns collapsing — signaling early recovery after the hawkish-hike shakeout, even as deep breadth stays thin.
SIP: PSKY ARM NUAI QNME
- What’s working: the Continuation/2LYNCH scan is thin with just 2 signals (FSLY, LNG); Delayed 9M and Reversal scans are empty — a dry signal environment that argues for patience over aggression.
- Leading sectors: live Trending Sector/Theme and ATR data are unavailable (market closed); yesterday’s leadership came from information technology (+2.5%), communication services (+3.9%), and semiconductors (PHLX +4.3%), with energy (-2.5%) at the bottom on the oil slide.
- Key event: President Trump addresses the UN General Assembly at 10:00 a.m. ET, followed by Gulf-state meetings on Iran — headline risk cuts both ways for oil and yields.
- Market read: Monday was a broad-feeling rally driven by a narrow cast — AMD, INTC, META, NVDA — so respect the tape but don’t confuse index strength with breadth health.
- DEP watchlist: no Delayed 9M signals fired — nothing to stage here today.
- SIPS: FSLY ($27.42, +14.9%, RVOL 2.0) and LNG ($274.98, +2.5%) are the only continuation swing candidates.
Today’s Market Narrative
Futures are edging higher after recovering from overnight losses, looking to extend Monday’s powerful advance that saw the S&P 500 rally 1.5%, the Nasdaq Composite jump 2.3%, and the Dow tack on 0.7%. The engine behind that move — a resurgence in AI and semiconductor names paired with falling oil and yields — is still running this morning, though the composition is telling: Dow futures are strongly bid (+172) while Nasdaq futures actually sit fractionally red (-10). After a near-vertical run in AMD (which crossed $600 for the first time, a fresh all-time high and a $1T market cap), INTC (+12.14%), and META (+11.34%), some digestion in the highest-flying tech is healthy, not alarming.
The narrative today is geopolitical relief. A Reuters report that Iran is prepared to reopen the Strait of Hormuz within seven days if the U.S. eases military pressure — plus signals that Tehran’s UN delegation has authority to pursue renewed diplomacy — has taken the war-premium out of crude. WTI is down $2.50 to $89.88 in the morning tape (the bond desk clocked it near $93.60 intraday off overnight highs above $97), extending Monday’s brutal 4.5% settlement decline. Lower oil is the grease for the whole risk trade: it eases inflation fears, pulls yields down, and lifts rate-sensitive and cyclical corners of the market.
The second leg is U.S.–China. Bloomberg reports officials discussed AI, investment, and trade on day two of New York talks ahead of the Trump-Xi meeting. Alibaba (BABA +2.86%) leaned into the theme by unveiling a proprietary AI chip, and Hong Kong extended its winning streak on renewed semiconductor strength (Tencent +5.0%). European bourses are mostly higher — DAX +0.5%, CAC +0.6%, FTSE +0.2% — as investors track the same oil-and-diplomacy calendar. The setup is constructive, but with breadth thin beneath the surface, this remains a leadership market, not a rising-tide market.
Bottom line: the same two forces that powered Monday — cheaper oil and lower rates — remain intact, but the follow-through will hinge on what Trump says at the UN at 10:00 a.m. ET. A conciliatory Iran tone keeps oil pressured and risk bid; any escalation reverses the trade fast.
Macro & Policy
The macro overhang remains last Tuesday’s hawkish Fed. The FOMC voted 12-0 to raise the fed funds range 25 bps to 3.75-4.00%, and Chair Warsh’s press conference made clear this was a “hawkish hike,” not a one-and-done. His message — “inflation is too high and has been for too long” and “the Committee will deliver price stability” — combined with a dot plot showing 16 of 18 officials expecting at least one more hike this year, told the market the tightening bias is real. That’s the wall this rally is climbing.
Yet the bond market is cooperating this morning, and that’s what matters for equities right now. Yields are slipping across the curve on the oil rollover: the 10-yr sits at 4.93% (-3 bps), the 2-yr at 4.73% (-2 bps), the 5-yr at 4.80% (-3 bps), and the 30-yr at 5.26% (-4 bps). Treasuries caught a bid overnight when WTI rolled over from above $97 after Saudi Arabia restarted its East-West pipeline (albeit at a low rate). Gold is soft, down $25.20 to $4,358.70, consistent with the risk-on, lower-inflation-fear tone.
Two policy catalysts frame the session. First, Trump’s UN address at 10:00 a.m. ET and afternoon Gulf-state meetings on Iran — the direct driver of oil and, by extension, yields. Rubio said Trump is open to meeting the Iranians this week, though no meeting is set. Second, the $69B 2-yr note auction at 1:00 p.m. ET; with the front end anchored by a hawkish Fed, demand and tail/stop-through will offer a real-time read on how the market is digesting the “more to come” rate message. Currencies are quiet — EUR/USD flat at 1.1461, USD/JPY 157.15.
Economic Calendar Today
- No U.S. economic data of note today — the second straight session without a major release, which hands the microphone to headlines (UN, Iran, U.S.-China) and the auction. Expect event-driven, not data-driven, volatility.
- 10:00 a.m. ET: President Trump addresses the UN General Assembly, followed by afternoon Gulf-state meetings on Iran — the day’s primary oil/yield catalyst.
- 1:00 p.m. ET: $69B 2-yr note auction — a demand gauge for the front end after the hawkish hike.
- Earnings reported before the open: AZO beat by $2.40 but missed on revenue; MLKN beat by $0.18, missed on revs, guided in-line; THO missed by $0.11 but beat on revs.
- Earnings after the close: KBH (homebuilder — housing/rates read) and WOR.
Earnings & Corporate News
The morning’s cleanest earnings story is On Holding (ONON +6.22%), gapping ~6.7% higher after setting 2029 targets of high-teens constant-currency sales growth, gross margin of at least 65%, and 22%+ adjusted EBITDA margin, plus an inaugural $1B buyback and a reaffirmed FY26 outlook. Vicor (VICR) is the top gapper, +9.5%, after guiding Q3 revenue above consensus. On the flip side, Endava (DAVA) is cratering ~12.2% — downgraded to Underperform at William Blair after its CFO was placed on leave amid an accounting probe. Diagnostics are soft, with DGX -6.5% and LH -2.0%.
Novo Nordisk (NVO -1.1%) remains a key macro-thematic story. Shares are digesting Monday’s Capital Markets Day, where 2026-2030 growth targets landed broadly in line with the pharma market and failed to ease patent-cliff and pricing worries. CagriSema Phase III data helped (12.4% weight loss vs. tirzepatide 5mg’s 9.1%), but the low-dose comparison and prior high-dose superiority miss cap the bull case. CEO Doustdar’s comments on considering M&A and needing to rebuild investor confidence underscore a company managing a difficult transition.
On the ratings tape: MetLife (MET) upgraded to Overweight at Piper (tgt $110), Fifth Third (FITB) to Buy at Citi (tgt $62), and West Pharma (WST) to Overweight at Morgan Stanley (tgt $400). Refiners took hits — Marathon (MPC) and Valero (VLO) both cut to Hold at Jefferies, consistent with the oil down-move. M&A stayed active: Cognex (CGNX) is buying RealSense for ~$500M, and TransDigm (TDG) is acquiring assets for $240M. The Paramount Skydance (PSKY) antitrust settlement clearing the WBD path remains a live catalyst — PSKY is a top SIP with an analyst target raise and RVOL of 4.37.
WaveFinder Signal Summary
The scan environment is dry, which reinforces the selective posture. The Continuation/2LYNCH scan carries just 2 names — FSLY ($27.42, +14.9%, RVOL 2.0) and LNG ($274.98, +2.5%) — while the Delayed 9M and Reversal scans are empty. Fewer than three continuation signals is a caution flag: it says quality breakouts are scarce beneath the mega-cap surface, so don’t chase second-tier setups.
Breadth is a two-speed story. Deep breadth is thin — only 23.86% of stocks sit above their 40-day SMA (barely up from 23.09%) — confirming the rally’s narrow, top-heavy character. But short-term thrust is real: 70% now sit above the 20-day SMA, up massively from 36% the prior session, and the 4% breakdown count collapsed from 213 to 75. Translation: a sharp short-term recovery is underway, but it hasn’t yet repaired the deeper damage from the hawkish-hike selloff. Watch the 40-SMA figure over the next few sessions — sustained expansion above 30% would confirm broadening; a stall keeps this a leadership-only tape.
Today’s Watchlist
- FSLY — Continuation/2LYNCH breakout at $27.42, +14.9% on RVOL 2.0; the highest-conviction swing signal on the board (BBT profile).
- LNG — 2LYNCH continuation at $274.98, +2.5%; low-ATR, energy-infrastructure name that can hold up even as oil falls.
- ARM — Top SIP riding the semi rally, +9.75% from open with RVOL 3.19; a cleaner large-cap AI proxy than the extended AMD/INTC.
- ONON — Gapping +6.7% on strong 2029 targets and a $1B buyback; watch for follow-through above the open.
- PSKY — Antitrust settlement clears the WBD deal; top SIP with target raise and RVOL 4.37 — event-driven, watch the gap fill.
- NVO — Down 1.1% on CMD disappointment; a tape-tell for GLP-1 sentiment and whether the pharma weakness deepens.
Action Codes of the Day
- CRT (Controlled Risk Taking) — With only 23.86% above the 40-SMA and a 2-signal continuation scan, this is a choppy, narrow-leadership tape; take calculated risks within the system rather than sizing up.
- T3A (Think 3 Days Ahead) — The Trump-Xi summit lands September 24 and Wednesday brings CTAS, PAYX, and GIS earnings; position ahead of catalysts, not into today’s headline noise.