Where we are: S&P 500 futures currently trade at 7191.50, up 0.10% on the day and near the top of today’s 7172.00-7208.25 range. Cash SPX closed Friday at a record, and futures are consolidating those gains in thin pre-market trade. We’re seeing some consolidation after that ninth record close, but the underlying bid remains strong.
What’s driving it: Optimism around earnings, particularly in the tech sector, continues to support the index. Morgan Stanley’s bullish call, stating little chance of a retreat due to earnings, capex, and AI adoption momentum, is resonating with investors, overshadowing concerns about Middle East tensions. The DXY is softening, currently at 98.14, which provides a tailwind for risk assets. US 10Y yields are modestly higher at 4.323%, but the real rate remains contained, avoiding equity headwinds.
- MarketWatch headline: “Why Morgan Stanley sees little possibility of a stock-market retreat” is reinforcing the bullish narrative.
- The retreat in the DXY to 98.14 offers some support.
- CFTC data shows net non-commercial positioning in S&P 500 futures is modestly short (-109,957 contracts), suggesting limited room for a sharp squeeze higher from here.
NY session focus: The focus shifts to tech earnings this week, with Microsoft, Alphabet, Amazon, and Apple reporting on Wednesday and Thursday. Watch for guidance on AI spending. Key levels to watch are 7200 as initial resistance and 7170 as near-term support. The current trade is cautiously long, waiting for confirmation from earnings. The risk trade is a disappointment on the AI capex outlook, especially after Qualcomm’s surge on its OpenAI/Meditek partnership. The pain trade is a major upside surprise from earnings that sends the SPX to new record highs above 7250.