The US stock market shows a negative tone in premarket trading, influenced by mixed Big Tech earnings reactions, speculation around President Trump’s upcoming announcement of a new Federal Reserve Chair nominee (potentially Kevin Warsh, seen as more hawkish), and broader concerns over tech sector momentum after reports like Microsoft’s. Microsoft was down 10% due to slowing cloud growth. The leading tech companies are struggling to deliver what is expected, this is a negative signal for the stock market.
Key risks: tech companies are overvalued, oil price is rallying, the dollar is breaking down, money moving into the safe haven which is gold, all this suggests higher inflation and higher bond yields. Plus risk of war in the Middle East, the US will probably attack Iran. The Fed is on pause, interest rates are unlikely to go down unless the US government wants to destroy the dollar. This occurs at a time when the 34-day BTI is overbought, stocks will turn down but after a final move up.