US futures rose on Wednesday, building on Tuesday’s rebound. The move remains data-led.
Tuesday’s June inflation print and today’s PPI came in far softer than expected, prompting traders to trim rate-hike bets, and attention now turns to Kevin Warsh’s testimony before the Senate Banking Committee.
The inflation surprise is doing more of the work than any single earnings report, although earnings are clearly helping.
JPMorgan’s record quarter, alongside Jamie Dimon’s comment that conditions are close to as good as it gets, helped set the tone on Tuesday, while strong updates from Morgan Stanley and BlackRock have added to that support.
ASML’s stronger-than-expected quarter has also helped steady sentiment in semiconductors, which matters for both index direction and broader momentum. The clear exception remains IBM, still dealing with Tuesday’s 25% collapse after warning that clients are shifting spending away from software and towards AI infrastructure.
Even so, the S&P 500 remains below its peak, and that level is still likely to act as resistance before the market can move into new territory. For now, this looks more like stabilisation after a resurgence in geopolitical risk than confirmation of a fresh leg higher.
On the geopolitical side, military operations in Iran are intensifying, with Trump threatening to widen attacks to power plants and infrastructure. Markets are largely looking through it for now, partly because oil is still moving through the Strait of Hormuz to some extent, but that risk has not gone away.
From a technical perspective, this still looks more like consolidation within an intact uptrend than the start of a broader breakdown. From a portfolio perspective, our stance has not changed. Despite a flat index, we continue to focus on buying and compounding the strongest stocks in the strongest sectors, with semiconductors still high on that list now that the AI trade has stabilised. We continue to monitor geopolitical developments as any further escalation around Hormuz would weigh on stocks.
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