Some peculiar action in front of the open

Briefing.com Summary:

*The headlines are good this morning, but the price action so far isn’t as good.

*Oil prices are lower, as the president again teases the possibility of a ceasefire deal with Iran.

*Alphabet has proposed an $80 billion equity offering to help fund its drive for more compute capacity.

There is a peculiar look to the equity market this morning. On the surface, it has a lot going for it in terms of notable headlines.

• Oil prices are lower (WTI -1.0% to $91.01), as President Trump continues to tease the possibility of an extended ceasefire agreement with Iran that will also feature the reopening of the Strait of Hormuz.
• Alphabet (GOOG) is feeding the AI capex beast with an $80 billion equity offering to help fund its drive for compute capacity.
• NVIDIA (NVDA) CEO Jensen Huang has christened Marvell Technology (MRVL) as the next trillion-dollar company.
• Hewlett-Packard Enterprise (HPE) is up nearly 30% in the wake of a much better-than-expected earnings report that flowed from robust server demand.

The peculiar element is that the equity futures market isn’t rallying around these reports. It is mostly lower, signalling a relatively flat start for the major indices.

Currently, the S&P 500 futures are down 15 points and are trading 0.2% below fair value, the Nasdaq 100 futures are down 23 points and are trading 0.1% below fair value, and the Dow Jones Industrial Average futures are down 247 points and are trading 0.5% below fair value.

We’re not sure there is much belief at this juncture that this softness will persist. Most likely see it as a tease for yet another buy-the-dip trade, notwithstanding plenty of chatter that the market and the AI trade are short-term overbought and due for a pullback.

Seeing is believing in this market, and no one since the end of March has seen a pullback that is believed to be the start of a correction or at least a meaningful consolidation phase. There will be one eventually, but plenty of market participants are still operating with a mindset that the trend is their friend.

And why not? That has absolutely been the case, both in terms of earnings estimates and price action. The former won’t be challenged today, but the latter could be.

The operative word is “could,” suggesting conditionality. The conditions on the ground have been nothing but good in terms of price action for the indices, which have been fortified by mega-cap and semiconductor stock leadership.

If there is going to be a change in the character of this market, it will start there.

—

Originally Posted June 2, 2026 – Some peculiar action in front of the open