Morning in New York: a healthy respite after the rally

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Capital Markets Research, Freedom Broker.

The news background remains ambiguous. The U.S. refrains from new strikes against Iran, but the parties do not indicate how long the ceasefire will last. At the same time, Washington continues to increase pressure on Iranian exports by intercepting tankers off the coast of South Asia. The situation around the Strait of Hormuz is still far from normalization. Expectations of continued diplomatic contacts between the US and Iran support current stock levels, but the lack of clarity on negotiations and energy transportation through the Strait of Hormuz leaves markets sensitive to any deterioration in the news background.

Macroeconomic data released on Thursday will hardly have a decisive impact on the course of trading, but will be important for assessing the state of the US economy. In this regard, the weekly statistics of initial applications for unemployment benefits (consensus: 210,000 after 207,000 a week earlier) may be of great interest. Also in the center of attention will be the preliminary estimates of business activity indices (PMI) from S&P Global for April. In the manufacturing sector, the market expects the index to rise from March's 52.3 to 52.5 points, while in the services sector it is expected to rise from 49.8 to 50.6 points. The FRB Chicago will report the national activity index (CFNAI) for March (consensus: -0.13 points, February: -0.11).

Blackstone (BX), Freeport-McMoRan (FCX), Comcast (CMCSA), American Express (AXP), Thermo Fisher Scientific (TMO), Lockheed Martin (LMT ) and Honeywell (HON) will report before the opening of the main session. Intel (INTC), Newmont (NEM), Baker Hughes (BKR), SAP (SAP), Digital Realty (DLR), Ameriprise Financial (AMP) and VeriSign (VRSN ) will report quarterly results after the close of trading.

Futures on American stock indices demonstrate negative dynamics. We assess the balance of risks for the upcoming session as neutral with moderate volatility. Further movement will depend on the simultaneous influence of the external background and the results of quarterly reports.

- Shares of Tesla (TSLA) are losing more than 3% in the premarket on the back of quarterly reports and Elon Musk's comments about raising the capital expenditure plan for 2026 from ~$20 bln announced in January to more than $25 bln. The announcement of plans to use Intel's 14A process technology in the Terafab project was of additional interest. For Intel (INTC), this is an important signal as it marks the first major external customer for the technology. For Tesla, it means betting on the development of its own computing and AI infrastructure.

- United Rentals (URI) shares gain more than 14% after the publication of the quarterly report, in which the company recorded record revenue and rental income for this period. An additional driver of the quotations growth was the increase of own revenue and EBITDA targets for 2026.

- Texas Instruments (TXN) rose more than 11%, reacting to the release of its first quarter results, in which revenues and profits exceeded average market expectations. The company's own outlook for the second quarter was better than consensus. Additional support for purchases was provided by strengthening demand from industrial enterprises and data centers, as well as growth of free cash flow due to normalization of capital expenditures.

- Shares of CSX (CSX) are adding more than 4% amid the release of quarterly results. The company boosted earnings thanks to a recovery in intermodal transportation, higher pricing and lower costs, and improved its revenue growth guidance for the current year. Management noted robust customer demand despite continued uncertainty in global supply chains and rising fuel costs.

- ServiceNow (NOW) shares welcomed the release of the company's quarterly results with a drop of more than 14%. In general, the company's figures and guidance on subscription revenue were better than expected, but the market reacted negatively to the expected pressure on margins and cash flow after the deal with Armis, as well as the negative impact of the Middle East conflict on sales.

- IBM (IBM) quotes are down about 7%, although the corporation's revenue and profit for the last quarter beat average forecasts. Investors were alarmed by the slowdown in revenue growth, including in software, while maintaining the annual guidance.

- Shares of Southwest Airlines (LUV) are losing about 1% after the release of its financials. The company presented a weak profit forecast for the second quarter due to an active increase in jet fuel prices.

April 22 trading on American stock exchanges ended in a steady plus. S&P 500 and Nasdaq 100 grew by 1.05% and 1.73% respectively, once again updating the historical maximums. Dow Jones rose by 0.69%, Russell 2000 - by 0.74%.

At the same time, the upward movement was uneven: the equal-weighted S&P 500 showed a result about 1.1 p.p. weaker than the classic index, indicating the continued concentration of demand in the largest securities.

The market was mainly supported by the extension of the ceasefire regime, which allowed investors to put the foreign policy agenda on the back burner, despite the new jump in oil prices. Positive dynamics was demonstrated by the technology sector: manufacturers of semiconductors, including memory chips, software developers, as well as companies associated with the sphere of artificial intelligence. As part of the "Magnificent Seven", Apple (AAPL: +2.63% at the close of trading on April 22), Amazon (AMZN: +2.18% ) and Alphabet (GOOGL: +2.12%) were the most in demand among buyers.

At the same time, the market appears to be underestimating the risk that continued constraints on the supply of energy and related products could increase pressure on economic growth over time.

In the broad market, the IT sector (XLK: +2.2%) led the gains, while energy (XLE: +1.2%) - supported by WTI crude oil, up 3.7% on the day - and telecoms (XLC: +0.61%) also traded in positive territory. The real estate (XLRE: -0.73%), industrials (XLI: -0.23%) and utilities (XLU: -0.18%) sectors were down.

The 20-year Treasury bond auction was successful, and UST yields declined by 1-2 bps by the end of the day. In general, the market is supported by a strong reporting season and the return of interest in AI themes. At the same time, the focus remains on the concentration of growth in a limited number of securities, more restrained corporate forecasts and deterioration in the ratio of earnings estimate revisions.

-GE Vernova (GEV: +13.8% at the close of trading on April 22) reported better-than-expected revenue and earnings for the first quarter and raised its outlook for the current year. The company noted a sequential increase in its order book and stronger demand. Moreover, its transaction volume in the data center electrification segment from January to March has already exceeded the full-year 2025 result. Additional support for the issuer's quotations was provided by successful results of the service segment.

- According to Reuters, private equity funds CVC and GTCR have submitted a joint bid to buy out Teleflex (TFX: +11.3%) with a subsequent delisting.

- Masco's (MAS: +10.8%) first quarter revenue and profit were better than expected. Sales in the sanitaryware and décor segments exceeded forecasts. Adjusted gross and operating margins improved from last year's levels. EPS outlook for fiscal 2026 has been confirmed.

-Boeing (BA: +5.5%) outperformed average market guidance for EPS, free cash flow and revenue. Strong results from the Defense Systems and Global Services divisions offset weaker performance in the Civil Aircraft business. The order book reached a record level. The airline's management still expects certification of the 737-7 and 737-10 airliners this year with first deliveries in 2027.

-Adobe (ADBE: +3.5%) announced a new $25 billion share repurchase program.

-Robinhood Markets (HOOD: +2.3%) reported that Robinhood Ventures Fund I will invest $75 million in OpenAI.

-United Airlines (UAL: -5.6%) reported quarterly revenue and earnings slightly above expectations, with strong performance in its corporate and premium segments. However, the EPS forecast for 2026 was downgraded due to rising fuel prices.

- Vertiv Holdings' (VRT: -2.3%) revenue and operating profit for the first quarter were above average expectations. Certain parameters of the company's own guideline for 2026 were raised. Nevertheless, the market reacted negatively to weaker-than-expected organic sales growth and management's conservative guidance for the second quarter. In addition, the correction followed a very active increase in quotations from the beginning of the year.

This article was AI-translated and verified by a human editor