Yesterday, most major US indices closed on either side of unchanged ahead of a big evening of tech earnings. Energy, Industrials and Utilities led. Comm Services, Discretionary and Healthcare lagged. Geopolitical news flow pushed oil markets around. Optimism from Pakistan and reports of an agreement between Oman and Iran for shipping through the Strait of Hormuz initially moved prices and Treasury yields lower. However, later comments from Vladimir Putin suggested an escalation in the Russia-Ukraine conflict helped reverse oil’s decline. Inflation data in the PCE was broadly inline as was consumer spending though underlying data did not scream “Robust Consumer”. Treasury yields and the USD ended higher weighing on the commodity complex. As we approached the close President Trump signed an executive order banning the purchase, import and installation of certain foreign-built bulk power equipment on the grounds of national security risks. Final rules for its implementation are due within 120 days. Names like GEV saw late-day strength. Politico also reported that the administration is also looking into a new round of semiconductor tariffs, which could extend to laptops, gaming consoles and data center servers.

The tech/AI earnings results were impressive overnight. Tech gains have helped the S&P 500 reclaim 7,700 and the index has continued to grind higher throughout the session currently up just over 0.5%. However, info tech is the only sector in the index trading higher. The equal weight version of the index has recouped most of the initial losses to trade around unchanged. The retail earnings generally looked solid though a lot of the beats were driven by tariff refunds. That being said, Dollar General is the only stock trading meaningfully higher while other companies that reported are in the red. From here the spotlight firmly shifts to Fed Chair Warsh’s speech tomorrow morning. The opening acts are already starting to get the crowd warmed up with their hawkish tunes. However, there is a good chance the crowd will ultimately be disappointed as they are yearning for guidance which has not been his modus operandi.