Morning Market Briefing 10/26

3 Things To Know For Today

1. Major Data Points: Today is light on the calendar, but the week is loaded. Durable goods, Consumer Confidence (forecast 80.5), and New Home Sales hit Tuesday. The Fed decision comes Wednesday afternoon with Chair Warsh's press conference; rates are expected to hold at 3.75%-4.00% (roughly 88% to 90% odds), but futures price about an 80% chance of another hike in December, so the guidance is the real event. Thursday brings advance Q3 GDP (forecast near 3%) and Core PCE (forecast 0.3%), and Friday closes with the Employment Cost Index.

2. Other Major Financial News: Big Tech reports this week, with Microsoft and Alphabet after Wednesday's close and Amazon and Intel after Thursday's close. The question hanging over all of them is AI spending, after last week's tech selloff on capex worries (Meta left its capex guidance unchanged while Tesla cut its full-year capex guidance by 20%). Neocloud names like CoreWeave, Nebius, and Iren are lower in premarket after Elon Musk predicted consolidation in the sector.

3. Market-Adjacent News (Iran War): The IRGC claimed full control of the Strait of Hormuz over the weekend and said two supertankers carrying more than 4.5 million barrels hit naval mines on an “unauthorised” route (unverified). U.S. Ambassador Tom Barrack said a strike “could” come, Trump distanced himself from that comment but warned of “another little Epic Fury” if there is no deal, and talks involving Pakistan and Qatar are reportedly underway. Houthi attacks on Saudi Arabia continued, and Brent topped $116 Friday, its highest since April, before easing to around $114 this morning.

Yesterday's Price Action

Friday's session was broader than the headline index moves suggest: the Dow fell 1.2% (about 653 points) to 52,215, the S&P 500 dropped 0.5% to 7,623.68, the Nasdaq slipped 0.2%, and the Russell 2000 gave back 0.3%. Tech actually steadied after Thursday's heavy losses (the S&P tech sector rose 0.35%), but the selling spread to consumer staples, discretionary, and financials, which each fell more than 1%, while energy jumped 2.5% to a record high as Brent climbed 3.1% to about $116.70. The 10-year Treasury yield rose about four basis points to roughly 4.99%, and the S&P 500 finished the week down 0.52%. Futures are higher this morning (ES +0.31%, NQ +0.25%) as oil eases, but with the Fed, Big Tech earnings, and Iran headlines all converging this week, NQ and ES open the new week looking for direction rather than conviction.

Quote Of The Day

“You don't need to know what is going to happen next in order to make money.”

– Mark Douglas, Trading in the Zone