OP Wire 2/13 (OP – Lite)

Markets opened Thursday with a positive tone as optimism surrounding a potential peace deal between Russia and Ukraine helped ease concerns over higher-than-expected inflation data. President Trump’s announcement that he had spoken with both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskiy about ending the prolonged conflict injected some bullish sentiment into the market, despite worries that the Federal Reserve may delay rate cuts due to persistent inflationary pressures.

Futures Higher Despite Inflation Concerns

U.S. stock futures showed resilience, with Dow futures up 40 points (0.1%), S&P 500 futures increasing by 3 points (0.1%), and Nasdaq 100 futures rising 49 points (0.2%) by early morning trading.

While the market initially reacted negatively to hotter-than-expected January consumer price index (CPI) data, Federal Reserve Chair Jerome Powell’s remarks kept investors from full panic mode. Powell reiterated that while inflation is still above the Fed’s 2% target, the central bank remains in a wait-and-see mode on future rate cuts.

White House economic advisor Kevin Hassett’s comments on Trump’s proposed reciprocal tariffs also added to market stability, as he suggested that the levies remain a “work in progress” and are not yet finalized. However, a formal announcement on the tariff structure is expected before Trump’s meeting with Indian Prime Minister Narendra Modi later today.

Inflation: CPI Fallout & PPI Data in Focus

January’s consumer price index (CPI) data revealed that inflation remains sticky, throwing cold water on expectations for near-term Fed rate cuts:

• Headline CPI: Rose 3.0% year-over-year (higher than the 2.9% estimate).
• Month-over-month CPI: Jumped 0.5% (versus the expected 0.3%).
• Core CPI: Increased 0.4% month-over-month, showing inflationary pressures remain broad-based.

The higher-than-expected CPI report led traders to reduce expectations for Fed rate cuts in 2025, now pricing in only one rate reduction.

Today’s Producer Price Index (PPI) report could further shape market expectations regarding inflation trends. Analysts expect a 0.3% monthly increase in producer prices, with the core PPI also forecasted to rise 0.3%.

Trump Pushes for Ukraine Peace Deal

President Trump revealed that he has spoken with both Putin and Zelenskiy regarding ending the war in Ukraine, stating that both leaders have expressed an interest in reaching a resolution. Reports also suggest that China has proposed a summit between Trump and Putin to facilitate peace talks.

While a ceasefire remains uncertain, analysts at Barclays suggest that any progress toward peace could ease fiscal and economic burdens on Europe, potentially boosting investor sentiment. However, major hurdles remain, including Russia’s demand for territorial concessions and Ukraine’s push for NATO membership to prevent future invasions.

Earnings Watch: Cisco Surges, Reddit Slumps

• Cisco Systems (CSCO) soared in after-hours trading after raising its full-year revenue guidance, citing strong AI-driven demand for networking infrastructure. The company now expects FY2025 sales between $56B-$56.5B, beating analyst expectations.
• Reddit (RDDT) shares plummeted after reporting weaker-than-expected daily active users, partially due to changes in Google’s search algorithm impacting traffic.

Upcoming earnings to watch:

• Pre-market: Deere & Company (DE)
• Post-market: Applied Materials (AMAT), Palo Alto Networks (PANW)

Oil Prices Slip on Ukraine Peace Talks & U.S. Inventory Build

Oil prices retreated amid expectations that a potential Russia-Ukraine peace deal could lead to relaxed sanctions and increased crude supply.

• WTI crude: Down 1% to $70.66 per barrel
• Brent crude: Down 1% to $74.47 per barrel

U.S. crude inventories also saw a larger-than-expected build, adding further downward pressure on prices.

Key Stock Levels to Watch

Bullish Setups:

• Reddit (RDDT) → Bullish on all timeframes
  • Resistance: $230.80
  • Support: $205.50, then $177.50
  • All indicators bullish except MACD
  • Earnings were today
• Hims & Hers (HIMS) → Bullish on all timeframes
  • First resistance: $43.64
  • Next resistance: $42.54
  • Earnings: February 24

Mixed Signals:

• Broadcom (AVGO) → Mostly bullish but turning bearish short term
  • Resistance: $240.30
  • Support: $227.25, then $215.35
  • Earnings: March 6
• Oracle (ORCL) → Neutral on all timeframes
  • Resistance: $174
  • Support: $167.50, then $165.40
  • Earnings: March 10

Bearish Setups:

• Advanced Micro Devices (AMD) → Bearish on all timeframes
  • No immediate support
  • Resistance: $116.20
  • Earnings: May 6

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