July 27th Pre-Market Brief

Good Morning

Green across the board after two losing weeks, and I'll take it. Oil backed off on the Iran pause over the weekend, the reason for that pause is less comforting than the headline.

Fed meeting Wednesday, then Microsoft, Meta, Apple and Amazon back to back earnings.

Let's dig in...

Today's Big Picture

1. Iran Pause
Futures are green on a third night without U.S. and Iranian fire. Iran's foreign ministry said Monday it has no talks running with Washington, denied agreeing to a ten-day ceasefire, and said Hormuz remains closed. Ship tracker Kpler counts six to twelve crossings a day through the strait, the same as last week. Crude is giving back its war premium faster than conditions on the water are changing.

2. Most Of The Capex Selling Already Happened
Alphabet beat last week, guided 2026 capital spending toward $205 billion, and got sold anyway. Free cash flow came in at negative $5.9 billion, its first negative quarter since the 2004 IPO. Deutsche Bank has discretionary investors back at early-April lows in the 17th percentile, with systematic funds near the 70th. The money that wanted out of the capex trade is already out, so Wednesday's reaction likely says more about volatility than guidance.

3. Friday's Tariffs Are Built To Stay
The new round covers 60 trading partners and 99.4 percent of American imports, and markets barely moved. The size was expected. What changed is the legal footing, since these run through a 1974 trade law rather than the emergency powers the Supreme Court struck down in February. Ebury's Matthew Ryan says that closes the escape hatch, which makes import costs a fixed input two days before a live Fed meeting.

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Stock Spotlight (pre-market)

Nvidia $NVDA ( ▼ 0.92% )  

In talks to guarantee $250 billion in financing for an OpenAI data center buildout, per the Journal, and separately launched an open source AI security alliance Monday with nearly forty companies. The guarantee moves the credit risk on that project onto Nvidia's balance sheet, so underwriters price the debt against the chip supplier rather than the buyer.

Micron $MU ( ▼ 6.99% )  

The read through on China's memory push after CXMT closed its Shanghai debut worth roughly $484 billion, under half of Micron's value, with Apple already testing its chips for devices sold in China. SK Hynix reports Tuesday, its first since listing in the U.S., and has to say out loud what CXMT does to memory pricing.

Exxon Mobil $XOM ( ▲ 0.03% )  

Lower premarket with the rest of energy, the only group red on a green morning. It reports Friday alongside Chevron, and both set capital plans against a barrel that was near $100 last week.

United Airlines $UAL ( ▲ 2.54% )  

Up premarket with Southwest and the cruise lines, since fuel is the largest variable cost in both businesses. Royal Caribbean reports Tuesday. It has to publish fuel assumptions one day after the move, and whatever it assumes sets the bar for everyone reporting behind it.

Cadence Design Systems $CDNS ( ▼ 1.28% )  

Reports after today's close. It sells the software chip companies use to design their products, so the order book leads actual silicon by a year or more. Lam Research and Qualcomm report Wednesday into a chip index that has sat a fifth below its high since late June, and both get read against whatever Cadence says tonight.

AstraZeneca $AZN ( ▲ 0.59% )  

Posted second quarter revenue of $15.4 billion and held its full year forecast, with cancer drug Tagrisso covering the decline in Farxiga after that drug lost U.S. patent protection in April. The CFO said Monday he remains confident in the $80 billion revenue target.

What to Watch

Upcoming IPO’s?
MarketBeat did an excellent job on this free IPO guide on IPO’s happening this year.

Fed Decision (Wednesday, 2:00 PM ET)
Traders put roughly a one in three chance on a rate increase Wednesday, up from about one in eight on July 17. Most still expect no change. The vote count matters more than the decision itself, because officials who disagree are recorded voting against, and those names print at 2:00 with the statement. Loretta Mester expects a hold with a couple of officials dissenting. Two or three votes against would say the committee is closer to hiking than the headline reads, and September is the meeting the bond market is already pricing.

CME Single-Stock Futures Launch (Today)
CME starts trading cash settled futures on more than fifty large U.S. companies today, twenty three hours a day, with micro contracts covering the biggest tech names. Four of those names report after the close this week, so the overnight reaction now has a listed venue that stays open through it. The Options Clearing Corp's Mat Cashman warns those post-earnings minutes can trade thin.

- John

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