ES futures hit record highs as weak U.S. data fuels Fed pause bets, while Mag 7 earnings, guidance, technicals drive near-term direction.
The E-mini S&P 500 futures (ES) closed at a fresh high on Tuesday as weak U.S. economic data all but cemented the possibility of a pause by the Federal Reserve. The underlying S&P 500 Index has been on a broader uptrend since the bear market bottom in late October 2022.
Will ES Continue Record Run? The near-term sustainability of the uptrend depends on a few risk events, including Wednesday’s Federal Open Market Committee (FOMC) rate decision and December-quarter earnings reports from key tech names, which are part of a group called the Magnificent Seven.
The shares of these companies, levered to artificial intelligence (AI) technology, contributed to much of the market’s upside seen in the current bull run. The Roundhill Magnificent Seven ETF (MAGS), an exchange-traded fund tracking the Mag 7 stocks, has largely outperformed the ES since it was rebranded to the current name in Nov. 2023.
Source: TradingView
When Mag 7 Reports, What To Watch: Software giant Microsoft, social-media heavyweight Meta Platforms, and Elon Musk-led electric vehicle company Tesla (TSLA) kick off proceedings for Mag 7 companies on Wednesday, followed by Apple on Tuesday.
Search giant Alphabet and e-commerce giant Amazon are due to report next week, while AI stalwart Nvidia, which rounds up the group, is scheduled to report only a month from now. Here’s what Wall Street models for the companies:
Microsoft:
- Earnings date: Jan. 28
- EPS Estimate: $3.85
- Revenue Estimate: $80.28B
Meta:
- Earnings date: Jan. 28
- EPS Estimate: $8.22
- Revenue Estimate: $58.46B
Tesla:
- Earnings date: Jan. 28
- EPS Estimate: $0.45
- Revenue Estimate: $24.76B
Apple:
- Earnings date: Jan. 29
- EPS Estimate: $2.67
- Revenue Estimate: $138.52B
Alphabet:
- Earnings date: Feb. 4
- EPS Estimate: $2.64
- Revenue Estimate: $114.44B
Amazon:
- Earnings date: Feb. 5
- EPS Estimate: $1.95
- Revenue Estimate: $211.17B
Nvidia:
- Earnings date: Feb. 26
- EPS Estimate: $1.52
- Revenue Estimate: $65.55B
Company-Specific Metrics: Apart from headline numbers, investors would keenly watch some key metrics to assess the health of their businesses. These include:
- Microsoft: Azure cloud business growth, Capital spending (Capex)
- Meta: After the big bottom-line miss in the third quarter due to the Trump administration’s tax bill, investors may focus on commentary regarding the positive impact the company flagged for the subsequent quarters. Capex would also be keenly watched
- Tesla: automotive revenue, negative impact from cancellation of automotive regulatory credit, robotaxi progress, 2026 deliveries guidance
- Apple: Installed base of active devices, iPhone installed base, management commentary regarding improved Siri launch timing
- Alphabet: Search revenue, Google Cloud revenue, guidance
- Amazon: AWS revenue, ad revenue growth, Capex
- Nvidia: Data center revenue, China commentary, guidance
What Does ES Chart Tell? The futures contract tied to the S&P 500 has run up too much, too fast. The 14-day relative strength index is at 59, suggesting mildly overbought levels. That said, the shorter-term 50-day simple moving average (SMA) is trading above the longer-term 100-day and 200-day moving averages, a structurally bullish trend. The 50-day SMA, currently at 6,872, could serve as a key support level in the event of a pullback.
Source: Yahoo Finance
With ES briefly topping the 7,000 level for the first time early Wednesday, a Federal Reserve decision in line with expectations, accompanied by dovish commentary, could further reinforce the rally’s momentum. As long as Fed messaging remains dovish and Mag 7 guidance holds, ES momentum appears intact above key moving-average support.
What Can Disrupt The ES Rally? The ES rally looks vulnerable if incoming catalysts disappoint. A hawkish Fed hold could initiate a pullback from record highs. On earnings, any soft guidance from Mag 7 leaders, particularly around AI monetization or rising Capex, may trigger index-level profit-taking given their outsized weighting.
Technically, a loss of the 50-day SMA near 6,872 would likely invite momentum sellers, opening the door to a deeper consolidation toward the 100-day average.
Read Next: Silver Rally Remains Intact Despite CME Margin Hike, Volatility Signals Tactical Long Opportunities