The US market: review and forecast for April 29. Equating the Fed and megacaps

Our Expectations

The key event this Wednesday will be the interest rate decision by the Federal Reserve System (consensus: 3.75%, unchanged). The press conference of Fed Chair Jerome Powell will also be in focus. No significant signals regarding the future path of monetary policy are expected; however, market participants will closely assess the tone of the Fed Chair. This is likely to be Powell’s last press conference in this role, as Kevin Warsh is expected to replace him in May. We continue to see room for two rate cuts in 2026, while futures markets are pricing in a pause in policy actions until 2027. In the macro calendar, attention will be on March durable goods orders (consensus: +0.5%, February: -1.3%) and core capital expenditures (consensus: +0.5%, previous month: +0.7%). However, these data releases are unlikely to have a decisive impact on market dynamics.

Trading will take place ahead of earnings reports from major technology corporations. The consensus expects sustained growth rates; however, after the strong rally in the AI segment, market expectations have risen significantly. Investors are looking not only for strong results but also for confirmation that AI investments are already translating into revenue and profit. For Microsoft, Azure performance is key. For Alphabet, Google Cloud results and advertising revenues will be most important. For Meta Platforms, monetization efficiency and cost control are critical. For Amazon, AWS growth and retail margin performance are in focus. Commentary on capital expenditures from these companies will influence the valuation dynamics of chipmakers. At the same time, news about potential internal issues at OpenAI has increased doubts within the investment community about the sustainability of current AI growth rates. As a result, market reactions to earnings are likely to be sharp, contributing to increased volatility. Geopolitical developments remain a source of pressure. The U.S. is intensifying sanctions on Iran, including measures targeting Chinese independent refineries, banks, and transportation infrastructure linked to oil exports from the Islamic Republic. According to media reports, Washington is also preparing to extend a naval blockade to force the opening of the Strait of Hormuz. This supports rising energy prices and heightens inflationary risks. WTI crude is up 2%, trading near a two-week high of around $102 per barrel. Before the market opens, quarterly results will be reported by AbbVie, Regeneron, AstraZeneca, Amphenol, Phillips 66, Avis Budget, and SoFi Technologies. In the post-market session, results will be released by Microsoft, Meta Platforms, Amazon, Alphabet, Qualcomm, Carvana, and Equinix. S&P 500 futures are consolidating, reflecting a balance between cautious optimism regarding major tech earnings and inflationary pressure driven by the rally in energy prices. We assess the risk balance for the upcoming session as neutral with moderate volatility, as mega-cap results will be released after the close of regular trading. Key support for the broad market index is at 7090 points, while a move above 7180 would open the potential for further upside.

Premarket Highlights

• Shares of Seagate Technology are up about 17%, reacting to its earnings release, an upward revision of long-term revenue growth guidance (20%+ annually), and strong guidance for the current quarter. Additional support comes from robust demand for AI data storage solutions and successful Mozaic HAMR technology performance among major cloud clients.
• NXP Semiconductors shares are gaining around 15% after the company reported broad-based demand growth and accelerating sales in automotive and “physical AI” segments. Its second-quarter outlook exceeded market expectations.
• Visa shares are up about 5% following its quarterly results. Net revenue rose 17% YoY to $11.2 billion, EPS increased 20% to $3.31. Payment volumes and processed transactions grew 9% YoY. Value-added services revenue rose 27%, while commercial and money movement segments grew 24%. Additional positives include a ~$33 billion share buyback program and improved guidance.
• Starbucks shares are up about 5%. Management described the latest quarter as a turning point and raised its outlook for comparable sales growth (to 5%+) and EPS guidance for 2026. Investors are responding positively to improved operational efficiency and restructuring plans in China.
• Bloom Energy shares are up about 12%, with quarterly EPS at $0.44 versus a $0.12 consensus, and revenue up 130% YoY. The upgraded annual outlook reflects strong demand for autonomous energy solutions for data centers.
• Shares of Robinhood are down about 9% amid expectations of rising operating expenses to $2.7–2.8 billion and continued investment in new business areas, despite strong ecosystem growth.

Market Recap

Trading on April 28 closed lower on U.S. equity markets. The S&P 500 declined 0.49%, the NASDAQ 100 fell 1.01%, the Dow Jones slipped 0.05%, and the Russell 2000 dropped 1.15%. Pressure came from concerns about AI capital spending sustainability following reports that OpenAI failed to meet its user and revenue targets. Additional downside was driven by profit-taking in semiconductor stocks after an 18-day rally. Shares of NVIDIA (-1.59%) and AMD (-3.41%) reflected rising concerns about AI monetization. Most “Magnificent Seven” stocks traded lower. The energy sector (XLE: +1.66%) led gains amid a 3.7% rise in WTI oil prices above $100 per barrel, while the IT sector (XLK: -1.69%) lagged. Macroeconomic data was moderately positive. The Conference Board consumer confidence index for April exceeded expectations and reached its highest level since December. Both current conditions and expectations improved, while inflation expectations eased slightly. Weekly ADP data indicated slower hiring growth. S&P Case-Shiller and FHFA home price indices declined in February. The U.S.-Iran conflict is fueling concerns about a persistent supply deficit in the physical oil market. Additional uncertainty came from the UAE’s announcement of its exit from OPEC to increase hydrocarbon production in line with its own strategy. Against this backdrop, U.S. Treasury yields rose by 3–4 bps on the short end of the curve. Investors also adopted a more cautious stance ahead of the FOMC rate decision and Jerome Powell’s press conference.

Corporate News

• Coca-Cola (+3.9%) reported organic revenue growth above expectations, driven by higher volumes and price increases. EPS guidance for 2026 was raised, while revenue and FCF outlooks were confirmed.
• General Motors (+1.3%) exceeded EBIT expectations by more than 40%, and its full-year guidance was raised by about 11.5% at the midpoint. A positive driver was the expected recovery of about $0.5 billion in tariff-related losses following a U.S. Supreme Court decision.
• Spotify (-12.4%) delivered mixed results. Operating profit beat expectations, but advertising was under pressure, ARPU and margins missed forecasts, and management issued cautious guidance.
• UPS (-4%) reported revenue and profit above expectations, but investors focused on weak domestic margins (~4%) and conservative guidance.
• Corning (-8.9%) saw concerns over weak free cash flow and additional costs related to production shutdowns, despite beating revenue expectations.