U.S. Futures & World Markets
Stocks are trying to catch a bid premarket after yesterday's volatile price action. The Fed held rates steady at the FOMC meeting, as expected, but the bond market had other ideas. Treasury yields soared and stocks tanked, as higher rates once again reminded investors who's really in charge.
After the closing bell, Microsoft topped earnings estimates and is +10% premarket. Expectations were low going into the print — down 19% YTD — so today's move feels like more of a relief rally than outright euphoria. On the flip side, Meta is getting hammered after missing estimates and FCF tumbled to its lowest level since 2022. META was already down 11.2% YTD as of yesterday and is down another 9% this morning. Investors don't mind AI spending, as long as they eventually see a return on their invested capital.
CORE Headlines
- Qatar sent the first LNG shipment through the Strait of Hormuz in three weeks. — Bloomberg
- U.S. Central Command presented President Trump an option for a 10-14 day campaign of intensive strikes on Iran. — WSJ
- OpenAI CFO Sarah Friar says annualized revenue in July topped all of Q2. — CNBC
- Microsoft reported robust cloud growth and a boost in paid AI subscribers — revenue increased 18% in the quarter. — WSJ
- Qualcomm's Q3 profit fell on lower sales and higher memory costs; soft outlook for the current quarter. — WSJ
- Anthony Fauci repeatedly invoked the Fifth Amendment in a heated Senate hearing on the pandemic. — WSJ
- The Pentagon earmarked $120B+ for contractors to step up production of Patriot missiles and long-delayed submarines. — WSJ
Charts & Data
The FOMC held 9-3 — the first time since 2016 that three bank presidents dissented in favor of a rate increase. Nick Timiraos, WSJ via Daily Chartbook: the Fed Whisperer confirms this is a historically significant vote.
30-year Treasury yield hit 5.21% — a new 19-year high. The market wants the Fed to act. If it does not, the market will. Bianco Research via Daily Chartbook: the bond vigilantes have returned.
30-year Treasury yields have never been up this much on a Fed decision while 2-year yields fell this much — unprecedented going back to August 1987. Sherwood via Daily Chartbook: "The most remarkable divergence across the yield curve in modern memory."
JPMorgan: Korean leveraged ETF deleveraging is approximately 90% complete — limited room for further forced selling. JPMorgan via Daily Chartbook: a key overhang on global markets is nearly cleared.
All Mag 7 hyperscalers underperforming the S&P 500 and Nasdaq 100 over the past 6 months — for the first time since October 2024. Sherwood via Daily Chartbook: the concentrated leadership story has fully broken down.
Tech's outperformance over Healthcare hit a historic extreme in June — the gap is already starting to close. Datatrek Research via Daily Chartbook: prior 40+ point extremes in 2023 and 2025 both reversed, with Healthcare taking the lead whenever markets turn risk-off.
Market breadth continues improving even as the index chops — "more stocks are moving into healthy uptrends." Grant Hawkridge via Daily Chartbook: the healthiest internal signal for bulls in an otherwise difficult tape.
Interesting Reads
- The economy increasingly rewards people who can afford to never wait, mix, or be observed — Your Brain on Money
- 'Ted Lasso' Was Finished. Then Jason Sudeikis Had an Epiphany — Hollywood Reporter
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