Where we are: The S&P 500 futures are trading at 7339.50, up 43 points, indicating a positive open for the New York session. The overnight range has been relatively tight, between 7293.75 and 7364.75. This level is well above yesterday’s cash close of 7259.20, suggesting follow-through buying pressure.
What’s driving it: Risk appetite is surging on news of a potential ceasefire in the Iran-US war, leading to a broad rally in equities and a sharp decline in oil prices. While the domestic macro picture has been relatively quiet, the rising 10Y real yield continues to exert a headwind on gold. The strong earnings reports, particularly from AI-related companies, are adding fuel to the fire.
- China’s call for a comprehensive ceasefire in the Iran-US war, triggering a slide in energy prices, is a major driver.
- The ADP Non-Farm Employment Change at 08:15 ET is the key data point today.
- Speculator positioning in S&P 500 futures remains modestly short (-100,522 contracts), but the week-on-week increase (+9,435) suggests some short covering is already underway.
NY session focus: All eyes will be on the 08:15 ET ADP release, which will set the tone for the session. Watch for the S&P 500 to test resistance at 7365 (overnight high), with a break above potentially opening the door to further gains. Support lies around 7294 (overnight low). The current trade is long equities, short crude. The trade at risk is short equities, given the positive sentiment and ceasefire news. The pain trade for the S&P 500 is a surprisingly strong ADP print, reigniting inflation fears and reversing the risk rally.