Ringside · Pre-Bell · Jul 22
- Alphabet and Tesla report after the close; with deliveries already known, Tesla's roughly 18% auto margin excluding credits is the number that decides the move.
- Oil jumps about 4% on an 11th day of U.S. strikes on Iran — Brent tops $94, WTI near $88.
- The 10-year yield sits at 4.63%, a two-month high, as bets on a Fed cut fade before next week's meeting.
Indexes
Futures point to a softer open after Tuesday's broad rebound, with the pullback concentrated in the semiconductors that led the bounce and the mood cautious ahead of two heavyweight reports tonight. S&P 500 futures traded near 7,529, and the SPDR S&P 500 fund eased to $746.43 in pre-market dealing while the Nasdaq-100 proxy slipped harder as chip names gave back part of a two-day surge.
| Futures | % Chg | Note |
|---|---|---|
| S&P 500 (ES) | -0.3% | Trading near 7,529 |
| Nasdaq 100 (NQ) | -0.7% | Chips lead the give-back |
| Dow (YM) | -0.1% | Industrials and banks steadier |
Overseas trading was quiet and mixed. Japan's Nikkei slipped 0.2% and Hong Kong's Hang Seng fell about 1.1%, while South Korea's Kospi added 0.7% to extend a memory-chip rebound that has pulled the index off its lows. European shares were narrowly mixed at midday as chip stocks cooled and oil climbed; UK inflation, reported earlier, eased to 2.6% in June and gave the Bank of England a little more room.
In the News
Rates, FX, Commodities
The bond market is doing the inflation math that stocks have mostly ignored. Yields pushed higher again as crude climbed, leaving the 10-year at its highest since mid-May and traders leaning toward the idea that firmer oil keeps the Federal Reserve on hold rather than cutting. Gold held near $4,100, close to its recent highs, with the Iran conflict keeping a steady bid under the metal.
| Rates & Vol | Level | Note |
|---|---|---|
| 2-Year Treasury | 4.20% | Pinned to the Fed path |
| 10-Year Treasury | 4.63% | Highest since mid-May |
| 30-Year Treasury | 5.08% | |
| 2s10s Spread | +43 bp | Curve holds its slope |
| VIX | 17.4 | Firmer but near year lows |
| Dollar Index (DXY) | 101.2 | Bid as cut odds fade |
| Commodity | Level | Note |
|---|---|---|
| WTI Crude | $87.56 | Up about 4% on Iran strikes |
| Brent Crude | $94.20 | Above $94, a one-month high |
| Gold | $4,100 | Holds near the highs |
| Nat Gas | $2.88 | Near a two-month low on supply |
Technicals
The S&P 500 closed Tuesday at 7,506, back above the 50-day average near 7,500 that it defended through last week's selling; the early-July peak around 7,575 is the next mark higher, and Tuesday's 7,462 low is the first support if futures follow through lower. The Nasdaq Composite reclaimed its own 50-day at 25,846, a repair that a soft chip open would quickly test. In rates, the 10-year at 4.63% is pressing the upper end of its recent range, with the mid-May high just overhead; a decisive move through it would tighten conditions for rate-sensitive groups, while the 2-year stays anchored to the Fed. The hourly chart below tracks Super Micro's overnight jump on its backlog news.
Breakouts & Breakdowns
Breakouts
ConocoPhillips (COP) — with energy the market's leadership as Brent clears $94, the oil producer is pushing against the top of a multi-week range; a close through it would open room toward the spring highs.
Micron (MU) — Tuesday's 12% surge broke the July downtrend and reclaimed the 50-day average; the open tests whether the move holds as chips cool, with that average now the line to defend.
Breakdowns
Microsoft (MSFT) — sits on its 50-day after two sessions of money rotating out of mega-cap software; a close below the average opens the early-July gap beneath it.
Salesforce (CRM) — slips toward support as Pegasystems' miss raises questions about AI-driven delays in enterprise-software deals; a heavy stretch of software earnings is the next test.
Top Movers
Gainers
Super Micro (SMCI) jumped about 15% in pre-market trading to $29.46 after the server maker said new orders topped $60 billion in its fiscal fourth quarter, a record backlog, and lifted its gross-margin outlook to a range of 15% to 17% from roughly 8% previously. The report says the demand for artificial-intelligence server hardware remains intact even as the chip stocks that supply it took a breather. It offers an encouraging read for the broader AI build-out ahead of tonight's big technology reports.
Korean names traded higher in New York alongside the Kospi's rebound, with SK Telecom (SKM) up about 7% and LG Display (LPL) up roughly 5%.
Losers
Pegasystems (PEGA) sank about 10% after the enterprise-software company reported adjusted earnings of $0.35 a share on $420.7 million in revenue, short of the $0.43 and $428.4 million Wall Street expected. Management pointed to slowing growth in annual contract value as shifting priorities in the AI market pushed customers to delay purchases. It was the second straight soft quarter and a caution flag for software names heading into a crowded earnings stretch.
Adtran (ADTN) fell roughly 8% after the networking-equipment maker said preliminary revenue and operating margin would come in below its prior guidance range.
AAR Corp (AIR) slipped about 5% even after the aviation-services firm beat with $928 million in quarterly sales against a $869 million estimate.
Key Macro Data Today
The economic calendar is light, with the weekly petroleum inventory report from the Energy Information Administration at 9:30 a.m. Eastern the item that matters most given where crude is trading. Forecasters expect a draw of about 1.5 million barrels after last week's 1.7 million decline; a bigger draw would add to the supply worry the Iran conflict has already stoked, while a build could take some heat out of the rally. The Federal Reserve is in its pre-meeting quiet period before next week's decision.
Earnings Today
Before the Open
AT&T (T) headlines the morning, with Philip Morris (PM), GE Vernova (GEV), and Moody's (MCO) also reporting. AT&T is the one to watch for a read on wireless subscriber growth and cash flow, though the setup is mixed after a string of analyst price-target cuts.
After the Close
Alphabet (GOOGL) and Tesla (TSLA) headline a marquee evening, with IBM (IBM) and ServiceNow (NOW) also due. The two megacaps are the week's main event and land on the same afternoon. For context, Tesla shares have risen the day after earnings in 10 of the last 12 quarters, usually by about 3%, though options this time imply a swing closer to 11%, the biggest in a year.
Drivers
The session's real event arrives after the close. Alphabet's report will be judged less on earnings, expected near $2.89 a share, than on whether Google Cloud's roughly 63% growth and record backlog justify a capital-spending plan that management has guided to $180 billion to $190 billion this year; free cash flow fell nearly half in the first quarter, and investors want to see the payoff. Tesla is the mirror image: it already delivered a record 480,126 vehicles last quarter, so the question is profitability, and the market is watching for automotive gross margin near 18% excluding regulatory credits against about 12.5% in the first quarter. A cautious word on spending or margins from either would carry well beyond their own shares.
Oil is the other variable, and it feeds straight into the rate outlook. Brent above $94 and a fresh round of strikes on Iran keep a premium in the barrel that flows through to gasoline and to inflation expectations, and the energy trade has been the market's leadership on the way up. The EIA inventory figures at 9:30 a.m. Eastern are the near-term catalyst, and the 10-year yield near its mid-May high of about 4.65% is the level that tells you how hard the bond market is taking the inflation threat.
The Federal Reserve meets July 28 and 29. No move is expected, and futures put the odds of a hold above 80%, but firmer oil has pushed traders toward pricing possible increases later in the year rather than the cuts they leaned on a month ago. The decision lands next Wednesday.