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Briefing.com Summary:
*President Trump covered a lot of ground in the longest-ever State of the Union address.
*NVIDIA is due to report its quarterly results after the close.
*Lowe's and TJX Cos. disappointed with their guidance, but CAVA Group shined.
There is a lot of talk this morning about the president's State of the Union address, and rightly so. He covered a lot of ground in the longest-ever State of the Union address. There was no mention, however, of additional new tax cut plans, as had been speculated.
He was reserved in his admonishment of the Supreme Court, calling the IEEPA ruling "unfortunate;" he asked Congress to ban insider trading and to ban large institutional investors from purchasing single-family homes; he proposed a government-backed 401K plan for workers whose employers don't offer one; he announced agreements with technology companies to produce their own electricity for data centers; he declared that he wants to end Obamacare subsidies going to insurers and to give that money directly to the people; and he reiterated that he will never allow Iran to have a nuclear weapon.
We doubt any of that is the basis for the positive disposition of the equity futures market this morning.
Currently, the S&P 500 futures are up 21 points and are trading 0.3% above fair value, the Nasdaq 100 futures are up 104 points and are trading 0.2% above fair value, and the Dow Jones Industrial Average futures are up 140 points and are trading 0.3% above fair value.
That disposition has more to do with the disposition of the mega-cap tech stocks. Most are trading higher in pre-market action, with investors taking yesterday's positive price action, along with the price action in the software stocks, as a buy-the-dip cue.
NVIDIA (NVDA), which reports its quarterly results after the close, is among the early gainers, trading up 0.9% on speculation that it will impress with its results and outlook.
Retailers Lowe's (LOW) and TJX Cos. (TJX) failed to do the same. Both exceeded quarterly expectations, yet both issued disappointing guidance. CAVA Group (CAVA), on the other hand, posted better-than-feared results and guided for FY26 same-store sales growth of 3.0% to 5.0%.
The consumer discretionary sector will have a lot to chew on today (no pun intended), as will the tech sector, given the disappointing outlooks from Workday (WDAY), HP, Inc. (HPQ), and First Solar (FSLR).
Still, with NVIDIA and most of the mega-cap cohort leaning higher, the major indices are in good standing ahead of the open. That will translate into a positive technical move for the S&P 500, which is set to open above resistance at its 50-day moving average (6,895).
The trick will be staying above that key technical level, and that's where the response to NVIDIA's report looms large. Today, then, will be a staging day. The real show starts tomorrow.
