Morning in New York: markets cautious ahead of Fed meeting and reports

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

The geopolitical backdrop continues to influence market sentiment. The day before, the White House discussed Tehran's latest proposal, but there were no public signals about the readiness of US President Donald Trump's administration to compromise. Against this background, any statements by the parties to the conflict during today's session will be closely monitored by trading participants.

Energy transportation through the Strait of Hormuz remains limited. Lipow Oil Associates estimates that the disruptions affect about 20 million barrels of crude oil and oil products per day, and that market stabilization will take four to six months even if hostilities end soon.

In anticipation of the FOMC meeting starting today, the results of which will be announced on Wednesday, investors prefer caution. Against this background, it is likely that trading ranges will narrow and the activity of market participants will decrease.

The central macro data release will be the publication of the Conference Board Consumer Confidence Index for April (consensus: 89 points, March: 91.8). The decline in the index will signal a restrained mood of households in the context of high energy prices and geopolitical uncertainty.

Before the open, Coca-Cola (KO), Spotify (SPOT), Corning (GLW), United Parcel (UPS), American Tower (AMT), General Motors (GM) and Hilton (HLT) will report quarterly results. Visa (V), T-Mobile (TMUS), Starbucks (SBUX), Robinhood (HOOD), Bloom Energy (BE), Seagate Technology (STX ) and Teradyne (TER) will report after the end of the main session.

Futures on US stock indices are trading slightly down. We assess the balance of risks for the upcoming session as neutral with moderate volatility.

- Sanmina (SANM) is up more than 11% after the company reported revenue more than doubled from last year's results to $4.01 billion, exceeding market expectations. Adjusted diluted earnings per share came in at $3.16 with a consensus of $2.4. Management announced a $600 mln share buyback program.

- Nucor (NUE) shares are reacting with more than 4% growth to the quarterly report: earnings per share amounted to $3.23 with average forecasts of $2.82. The steelmaking division updated the record on shipments.

- Erasca (ERAS) shares collapsed more than 33% following the release of data from the Phase 1 trial of the drug ERAS-0015. Despite high unconfirmed efficacy levels, the market took a negative view of the patent lawsuit from Revolution Medicines (RVMD) and the disclosure of the death of a patient involved in the trial.

- Weak outlook for the second quarter caused Rambus (RMBS) quotations to fall by more than 16%. The midpoint of the product revenue range ($95-101 mln) and contract revenue guidance ($19-25 mln) failed to meet the market's inflated expectations.

- Celestica (CLS) shares are losing more than 10% despite strong reporting. The issuer's first-quarter revenue rose 53% YoY to $4.05 bln, with adjusted EPS of $2.16 vs. $1.2 a year earlier. Management raised its full-year guidance for revenue and adjusted EPS to $19 bln and $10.15, respectively.

-Amkor Technology (AMKR) is correcting more than 5%, although its quarterly earnings came in at $0.33 with a consensus of $0.29 and revenue reached $1.685 billion. However, the company's own guidance for the second quarter was only slightly above average market forecasts, triggering profit taking after the prior rally.

Trades on April 27 on American stock exchanges ended with multidirectional trends. S&P 500 added 0.12%, NASDAQ 100 remained virtually unchanged, Dow Jones decreased by 0.13%, and Russell 2000 increased by a symbolic 0.04%. The participants of the session took a wait-and-see attitude in anticipation of the week full of important releases of corporate reports, including from the largest representatives of the "Magnificent Seven". The biggest demand in this group was for NVIDIA (NVDA: +4% at the close of trading on April 27) and Alphabet (GOOGL: +1.73%), while Apple (AAPL: -1.27% ) and Amazon (AMZN: -1.09%) went down.

The financial sector (XLF: +0.76%) emerged as the leader of growth in the broad market, supported by quotations of banks, insurance companies and credit card issuers. Non-cyclical consumer goods providers (XLP: -1.07%) and the real estate industry (XLRE: -0.78%) came under pressure, reflecting capital outflows from protective and rate-sensitive segments amid continued risk appetite.

Monday's macroeconomic calendar was lackluster. The FRB Dallas Manufacturing Activity Index for April fell to -2.3 points versus -0.2 in March, with the consensus suggesting an increase of 0.9. Nevertheless, domestic components, including production and new orders, showed improvement, which softened the negative interpretation of the release.

US Treasury yields rose by 2-3 bps with a slight increase in the slope of the curve.

WTI crude oil rose another 2%, continuing a rally that saw its price climb 14% over the week amid a persistent geopolitical premium. Gold corrected by 1% and silver by 1.8%.

The positive sentiment in the markets was supported by the news of Senator Thom Tillis' support of Kevin Warsh's candidacy for Fed Chairman, as the US Department of Justice has completed its investigation into the current head of the regulator, Jerome Powell.

President Donald Trump took a negative view of Tehran's latest proposal discussed in a meeting with the national security team. Nevertheless, the ceasefire remains in place and the sides continue informal contacts. Trading participants have generally ignored the stream of contradictory statements on the assumption that a settlement will be protracted.

- India's Sun Pharmaceutical announced the acquisition of Organon & Co. (OGN: +16.87%) for $11.75 billion ($14 per share), which implies a premium of about 24%. The deal is expected to close in early 2027.

-POET Technologies (POET: -47.35%) said it has canceled all orders received from Celestial AI, a subsidiary of Marvell (MRVL), due to a breach of confidentiality agreement.

- Domino's Pizza (DPZ: -8.84%) revenue, earnings per share and comparable sales werebelow expectations, with both the U.S. and international segments showing disappointing performance. Additional pressure on the quotations was exerted by the decrease in margins.

-Oruka Therapeutics (ORKA: +10.66%) reported positive results from its Phase II A trial of ORKA-001. The proportion of patients whose skin symptoms of psoriasis completely disappeared (PASI 100) reached 63.5% at week 16.

-Joby Aviation (JOBY: +6.35%) completed the first demonstration flights of its electric vertical takeoff and landing electric aircraft between two waypoints in New York City.

- Verizon Communications (VZ: +1.5%) earnings and free cash flow beat average market guidance. Management raised the midpoint of the annual EPS guidance range. At the same time, analysts note accelerating customer churn and declining average revenue per subscriber.

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