Morning in New York: Fed rhetoric will determine stock market sentiment

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

The issues of US migration policy are gaining unexpected urgency. President Donald Trump's executive order to impose a $100,000 fee for visas for foreign highly skilled professionals provoked panic among employees of US technology companies from India and China. Workers returned to the US en masse, with corporations including Microsoft (MSFT) and Amazon (AMZN) and Goldman Sachs (GS) sending out emergency instructions to staff. The White House later clarified that the new rules only apply to future filings. However, the situation showed how quickly political decisions can transform into a factor of uncertainty for business and become a reason for market fluctuations.

There are several important speeches scheduled for this Monday from Fed officials, including New York Fed Chief John Williams, who will attend the monetary conference, his Richmond counterpart Thomas Barkin and new Board of Governors member Stephen Miran. Their comments could provide markets with new guidance on the trajectory of rates and an assessment of the sustainability of inflation.

Firefly Aerospace (FLY) will report quarterly results after the close of major trading.

Futures on US indices demonstrate negative dynamics. We assess the balance of risks as neutral with moderate volatility. We focus on S&P 500 fluctuations in the range of 6600-6700 points (from -1% to +0.5% to the previous session's closing level).

- The first NVIDIA AI Technology Center in the Middle East opens in Abu Dhabi in partnership with the Technology Innovation Institute. Nvidia (NVDA) will unveil its Thor chip for the development of robotics, including transportation and logistics. Its premarket quotes are slightly up.

- Berkshire Hathaway (BRK.B) has completely exited its investment in BYD (BYDDY), closing out a position that has seen more than 20 times returns over 17 years. On the premarket, shares of the Chinese carmaker are showing a slight decline.

- Oracle (ORCL) and Meta (META) are discussing a potential $20 billion cloud deal, demonstrating Oracle's growing infrastructure strength.

- Ericsson (ERIC) has been awarded an eight-year, $1.33 billion contract by VodafoneThree to supply the UK with equipment for 5G networks. Company quotes react to the news with moderate growth.

- Pfizer (PFE) is close to buying Metsera (MTSR) for $7.3 billion to strengthen its position in the obesity drugs market. The deal will allow the company to strengthen its position in the fast-growing GLP-1 segment after failures with its own experimental projects. The pharma giant's securities are moving upward on the premarket.

- Tesla (TSLA) has received approval to test unmanned vehicles in Arizona.

- Apple's (AAPL) move to control all the major chips in the iPhone signals a renewed focus on AI.

- Trump is backing Union Pacific's (UNP) bid to buy Norfolk Southern (NSC), a combined company valued at $85 billion.

Trading on September 19 on U.S. stock exchanges ended mostly in positive territory. S&P 500 rose 0.49%, NASDAQ 100 rose 0.7%, Dow Jones added 0.37%, and Russell 2000 declined 0.77%. Shares of the "Magnificent Seven" generally showed positive dynamics. The most pronounced was Apple (AAPL: +3.2%) after Bloomberg reports about high demand for new iPhones in Asia. The technology sector (XLK: +1.01%) was the leader of growth. The energy sector (XLE: -1.33%) was the outsider on the back of falling oil prices after the EU announced a new package of sanctions against Russia.

The phone conversation between Donald Trump and Xi Jinping brought no surprises. The two leaders confirmed plans to meet at the APEC summit in November.

New member of the Fed's Board of Governors Stephen Miran noted that import duties do not have a significant impact on inflation, pointing to the negative impact of tight monetary conditions on the labor market. Minneapolis FRB head Neel Kashkari said he expects two more rate cuts this year. In his opinion, its neutral level is 3.1% and the Fed's policy today is not as restrictive as previously thought.

- Instacart (CART: -8.6%) shares were under pressure after Wedbush's comments that Amazon's (AMZN) expansion of its perishable delivery service, including a deal with the Winn-Dixie chain, directly threatens the small retailer's business.

- Shares of Cognizant (CTSH: -4.7%) reacted negatively to reports of the Trump administration's plans to impose an additional $100k fee for each H-1B visa.

- Lennar (LEN: -4.2%) reported a drop in home sales revenue and a 9% y/y decline in average price for the last quarter. Despite the growth in orders, investors took a negative view of the volume and margin guidance for the current quarter, although management's decision to slow the pace of construction was a positive development.

- The departure of Opendoor (OPEN: -3.7%) CFO Selim Freihi was a negative factor for the company's stock. Christy Schwartz was appointed to the post temporarily.

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