U.S. equity index futures are in retreat after another session of weakness in the Dow 30 (-0.6% to 48,861) while the S&P 500 (-0.04% to 7,135) was little changed and the tech-heavy Nasdaq 100 (+0.6% to 27,186) outperformed, with attention in extended trading on earnings from four of the "Magnificent Seven" names (see Stocks below) and as investors digested a divided Fed holding on rates (see FX/Central Banks below) alongside rising geopolitical tensions lifting oil prices (see Commodities); Treasury yields jumped across the curve and so too in real terms with breakeven inflation rates continuing to climb higher as bond investors noted rising energy prices and the hawkish hold out of the Fed, and market pricing (CME's FedWatch) isn't far off completing removing minority likelihoods of a rate cut this year with minority likelihoods of a hike rising instead.
Shares of Nvidia (NASDAQ:NVDA) (-1.8%) ended lower in what was a mostly green session for semiconductors with significant gains for AMD (+4.3%), Intel (NASDAQ:INTC) (+12.1%), and gains in extended trading for all three following increased capex spending (see earnings below) from Big Tech; NXP Semiconductors (+25.6%) and Seagate Technology (+11.1%) surging on strong results and guidance (see below), lifting memory-related names including Western Digital (+5.6%) and SanDisk (+6.2%).
Shares of Spotify (+2.2%) partially recover off Tuesday's plunge and gets an upgrade out of Rosenblatt to buy though with a smaller price target, with far larger gains for T-Mobile (+6.1%) upgraded to outperform out of Oppenheimer, while MercadoLibre (-1.4%) was downgraded to neutral out of UBS who notably reduced its price target.
Meme stock movers: Beyond Meat (-5.2%), Kohl's (-5.6%), GoPro (-2%), Krispy Kreme (-3.4%), AMC (-4.6%), BlackBerry (+4.6%), Nokia (+10.3%), GameStop (-2.3%).
Crypto stocks track cryptocurrencies lower: Coinbase (-6.4%), MicroStrategy (-4.5%), Mara Holdings (-2.7%), Gemini Space Station (-7.4%), Bullish (-8.3%).
- Microsoft (NASDAQ:MSFT): beat on earnings and revenue with strong Azure growth, but heavy AI capex and softer margin outlook weighed on sentiment; shares up 0.3% after hours
- Amazon (NASDAQ:AMZN): beat on earnings and revenue with solid cloud and retail performance; shares up 2.7% in extended trading
- Alphabet (NASDAQ:GOOGL): beat on revenue with strong cloud growth and raised capex outlook; shares jump 7.1% after hours
- Meta Platforms (NASDAQ:META): beat on revenue but missed on user growth and raised capex significantly; shares plummet 7% in extended trading
- KLA: mixed results with underwhelming guidance; shares drop 7.2% after hours
Gold remains under pressure even after partially recovering this morning with a move back below $4,550 as a firmer dollar and rising Treasury yields weighed on the non-yielding metal following the Fed decision that reinforced a "higher-for-longer" rate backdrop, and the climb in oil prices raising fears of a liquidity event that could see more central banks opt to offload gold; silver's drop was steeper getting as low as the $70s before partially recovering and taking the gold/silver ratio to 63.
Oil prices (WTI) surge to reach $108, as Axios report says U.S. Central Command to present President Trump with plans for military action on Iran after he rejected the latter's proposal on reopening the Strait of Hormuz, with ongoing limited passage through the strait further raising supply fears, and significant drawdowns on all fronts (oil -6.2m barrels, gasoline -6.1m and distillate -4.5m) for EIA's weekly energy inventory estimates.
Bitcoin fails to get back into its short-term bull channel sliding instead to $75K as traders note a more tested macro atmosphere and rising yields, with Ether also suffering a similar red session but hovering above $2.2K this morning.
US Dollar Index pushes higher within the 98 handle supported by a hawkish Fed hold, rising Treasury yields, and losses for energy-exposed currencies as oil prices climb.
Federal Open Market Committee holds on rates at 3.5-3.75% as expected though four dissented (largest since 1992) as Miran wanted a rate cut while Hammack, Kashkari and Logan "did not support inclusion of an easing bias in the statement" with the statement also tweaked to affirm inflation "is elevated" removing "remains somewhat" and adding "a high level of uncertainty about the economic outlook" due to developments in the Middle East; Fed Chair Powell in what was likely his last as leader sees elevated oil prices "will push up inflation" in the near term and plans to go "back to being a governor" due to legal actions taken against him; Kevin Warsh clears Senate Banking Committee and full Senate vote is expected week after next prior to May 15 expiry of Powell's term as Fed Chair.
Bank of Canada holds on rates at 2.25% as expected.
- Indices: Shifts back to majority short in the Nasdaq 100 (slight sell 51% from a majority buy 55% yesterday) and moves further into heavy buy territory in the Dow 30 (71% from 67%) as it suffered retreat; elsewhere pushes further into extreme buy territory in the Hang Seng (85%) while heavy buy sentiment trimmed a bit in the Nikkei 225 (66% from 69%).
- Commodities: Longs get squeezed in gold (heavy buy 77% from extreme buy 80% yesterday) reducing long sentiment there though traders in silver (86%) hold on; WTI’s surge sees sentiment push further into majority short territory (62% from 56%).
- FX: Shifts from the middle in EUR/USD (to a slight sell 52%), shorts unwind a bit in AUD/USD following the pullback (with the bias a slight sell 52% from 55% yesterday), and sentiment close to shifting in GBP/JPY (slight sell 51%) as traders no longer prefer shorting into price gains.
U.S. durable goods in March resilient up 0.8% m/m (vs 0.4%), and a healthier 0.9% m/m when excluding transportation though excluding defense was down 0.3%; building permits in February improving to 1.54m and up 11% though housing starts dropped 3% to 1.36m; weekly mortgage applications (MBA) -1.6%
German preliminary CPI for April rises 0.6% m/m to reach 2.9% y/y even if the latter print was a notch below forecast
Chinese manufacturing PMI (NBS) drops to 50.3 though above forecast and still in expansionary territory with a far better reading and improvement for the reading out of RatingDog (to 52.2 from 50.8), while non-manufacturing PMI (NBS) falls into contraction with a 49.4 print and worse than anticipated
Bank of England (3 pm, expected to hold) and European Central Bank (4:15 pm, also expected to hold with the press conference at 4:45 pm); EZ preliminary pricing and GDP (1 pm), German retail sales (10 am), labor data (11:55), and its preliminary GDP (at 12 pm)