Good morning and Happy Fed Day,
 
The Tech Wreck continued to play out yesterday as semis/memory stocks remained under significant pressure. Tech-heavy Asian indices sold off sharply as a prelude to the US session but the S&P 500 opened only modestly lower, just below the 7400 level that has served as near-term support. The index rallied off those early lows, improving throughout the day but couldn’t quite retest the 50d ma ~7470, ending the day up 0.2%. Despite the selling in tech breadth was much better as the equal-weight rose over 1% and 8/11 sectors ended the day in the green. Healthcare, Staples, Materials and Comm Services led the way higher, as solid earnings helped drive the groups higher. For Tech, the weakness was concentrated in the semis/memory space. Buyers dipped their toes in, however. The DRAM ETF fell 9% but finished off its lows, and Nvidia worked itself into the green after being down ~2% at its lows. The hyperscalers were mostly up on the day and software was up as well.
 
As we await the Fed decision this afternoon and more hyperscaler earnings tonight, US equity futures were trading around unchanged this morning and in the middle of the overnight range, though look to be weakening a bit as we approach the Bell. The move is tame despite Brent crude oil reversing yesterday’s decline after Iran launched missiles at US forces in Jordan overnight, and the US targeted Iran-backed groups in Iraq. Earnings continue to pile up as well. SK Hynix reported last night in Asia and fell another 10%. Once again, the numbers were very strong, as was management’s commentary about demand, but sales actually missed revenue and op inc estimates. In some other earnings news:
 

• Data center infrastructure provider VRT is down ~10% after missing top line estimates on timing issues, though AI demand continues to build.  
• V is down 2% despite payment volumes up 10% in constant dollars. Part of the weakness could be the declining trend in volumes as the quarter progressed.
• F is up 5% on a strong report and higher guidance

 
Before the open, President Trump said that the US will launch strikes against Iran in response to the earlier attacks on US forces in Jordan. Futures fell on the comments but the move was relatively modest.            
 

 
The Fed rate decision will the key event today. We haven’t seen the market be as unsure of the outcome as for today’s decision in some time, pricing in a ~35% chance of a hike, so it would not be shocking if that would happen. The Fed members are relatively split on their rate assumptions for the remainder of the year. On the other hand, the recent inflation prints have been tame and Warsh’s Task Forces still have to report back with their findings and suggestions, which could lead to significant changes in the way the Fed operates. Taking action before that time could make things a bit messy before all the updates. There’s also significant uncertainty about how Warsh will handle the press conference, especially as he moved past his initial, intro conference last month. Treasuries are backing up a bit this morning after 3 days of declines, taking into account crude’s strength today. The US Dollar Index is slightly higher.  
 

• US 2yr +3bps to 4.31%, 5yr +3bps to 4.40%, 10yr +2bps to 4.63%, 30yr +1bps to 5.10%
• USD index: +$0.04 to $101.31

Global markets were mixed overnight. South Korea, triggered another circuit breaker overnight,  falling 6% after SK Hynix earnings missed the very high street expectations. Local share were down nearly 10% overnight though the ADRs are only slightly lower in the pre-market. This morning, the South Korean Finance Ministry vowed additional steps to stabilize markets including limiting retail exposure to leveraged ETFs which comes after the recent increase in deposit requirements. The Nikkei fell >1% with weakness in local chip stocks though software was stronger. Auto stocks were sharply higher. There is some focus on the 7.1 magnitude earthquake which has caused some chip and auto companies to halt production as they assess damage. The BOJ has its rate decision tomorrow evening. The Hang Seng closed up 2% overnight with broad based gains . Yesterday the Trump administration banned imports of new Chinese robots and power inverters. India and Australia were both up ~1%. Most European indices are trading lower. The DAX is outperforming with Deutsche Bank, Rheinmetall and BASF all trading higher after earnings. The FTSE 100 is also modestly higher with oil companies and miners trading to the upside. Staples are giving back some of yesterday’s gains. Standard Charter is a standout after earnings.
 

 
The Iran attacks and subsequent Trump response have sent oil prices higher reversing about half of this week’s decline. ICE Brent is up ~7% at session highs just under $90. US nat gas prices are a touch lower though prices in Europe are higher. Metals markets were trying to bounce overnight but have turned lower. Ag is mixed with corn/soy extending this week’s losses. Crypto is mixed with Bitcoin up slightly while Ethereum pulls back.
 

 
Earnings:
After-Market: AAT, AKR, APAM, ASH, ASM, AXS, BE, BRSP, BXP, CAR, CHE, CLW, CR, CSGP, CTO, ENPH, EXE, EXR, F, FCF, FE, GEF, HIW, KLAC, MIR, MDLZ, NBR, NOV, NXPI, OI, OMC, ORN, PDM, PPG, QUAD, RNST, ROG, SKHY, STAG, STX, TER, THG, TRTX, TTAM, UNM, V, VLTO, WM, WPC, ZWS
Pre-Market (Wed): AER, AON, APH, AVTR, BG, BLCO, BSX, BTU, CBRE, CLH, CLVT, CSTM, CTSH, DB, DBD, DMC, ETR, EVR, EXP, FTV, FVRR, GD, GEHC, GNRC, GRMN, HAYW, HUM, IEX, JCI, KEX, LAD, LHX, LII, LMND, LXP, MAS, MHO, ODFL, OGE, OMF, PAG, PB, PG, PRG, PSN, PUMP, SCL, SITE, SLGN, SMG, SOFI, SW, SWK, TEVA, UBS, UMC, VFC, VMC, VRSK, VRT, WEC, WING, WNC, WSO
After-Market (Wed): ACR, AEM, AM, AR, ALKT, ARM, AWK, BHC, BHE, BNL, CHRW, CMG, CMTG, CNMD, COUR, CRK, CSL, CVI, CVLG, CVNA, CWH, EG, EIG, EQIX, EPR, ESS, ETD, FBRT, FCPT, FICO, FLS, FMC, FTNT, GFL, GKOS, GRBK, HLI, HOOD, HXL, INVH, KGC, LRCX, LXU, MAA, MAX, MC, META, MGM, MOD, MSFT, MTG, MTH, MX, NEU, NFG, NGVT, NPKI, NSP, OHI, PBI, PCOR, PEB, PFS, PFSI, PMT, PSA, QCOM, QTWO, RGR, RM, RSI, RYZ, Samsung, SBUX, SCI, ST, TDOC, TK, TNK, TYL, UAN, UIS, VICI, VTR, WHD
 
Economic Data:
US:

• Mortgage apps: -6.4% w/w prior 1.9%; 30yr Rate 6.76% prior 6.69%
• 10:30 Oil Inventories
• 2:00pm Fed rate decision
• 2:30pm Fed press conference

Global:

• Australia inflation: -0.1%/3.8% m.m/y.y vs. 0.2%/4.0% cons., prior -0.7%/4%
• Germany Import Prices: -0.7% vs. -0.7% cons., prior 0.7%