The US stock market maintains an appearance of stability, but the foundation beneath this calm may prove fragile. Indices remain near historic highs.
Nonetheless, a potentially explosive combination is brewing up behind the facade of steady growth: geopolitical tensions, uncertainty surrounding the Fed's interest rate policy, and the upcoming corporate earnings season.
On Friday, futures are showing weakness as investors hesitate to increase their positions following reports of a possible US military strike on Iran. The White House confirmed that President Trump is considering active scenarios, with a decision potentially coming within the next two weeks.
The ongoing standoff between Israel and Iran is heightening risks not only for regional security but also for global markets, particularly due to potential disruptions in oil supply. This is already beginning to influence investor behavior, especially in commodity and energy assets.
This week, the S&P 500 and Nasdaq posted modest gains, while the Dow Jones lagged behind due to weak performance in cyclical sectors. Markets were supported by the overall neutral outcome of the Fed meeting, but the effect was short-lived.
Jerome Powell took a cautious stance: inflationary risks persist, and the White House's tariff policy adds further uncertainty. Although the Fed left the interest rate unchanged, it lowered its economic growth forecast and signaled the possibility of two rate cuts in 2025. This calmed investors but didn't serve as a new driver for continued growth.
Technical picture of the benchmark indices The technical outlook remains uncertain. The S&P 500 is trading around 6,020, staying above the key support level of 5,950 and below strong resistance in the 6,050–6,075 range. The range remains intact: 5,930 as the lower border and 6,075 as the upper. A breakout of either level could set a new directional trend.
For now, the market is consolidating, maintaining an upward bias but without clear signals of trend continuation. The Nasdaq 100 is at 21,920, having quickly rebounded from a drop to 21,470.
Resistance in the 21,970–22,100 range is currently capping growth. Holding above 21,700 keeps hopes alive for a move toward 22,200, but without news catalysts—such as a breakthrough in trade talks or easing inflationary pressure—momentum may quickly fade.
The coming days promise to be tense. Geopolitics remains the main source of risk: a single tweet or statement from either side could send futures plunging within minutes.
In addition, economic data is in focus, including business activity reports, housing market figures, and jobless claims. Special attention is being paid to US bond yields: at the slightest hint of a hawkish Fed pivot, combined with unstable inflation, the current stock market rally could quickly turn into a wave of profit-taking.
Why Palo Alto shares soared by 10.2% after its earnings report Palo Alto Networks shares surged by 10.2% following its latest quarterly report, and the surge appears justified. The company delivered strong results: revenue met expectations, and earnings per share exceeded forecasts.
This reinforced investor confidence in the resilience of demand for enterprise cybersecurity solutions despite a volatile macroeconomic backdrop. Revenue growth was accompanied by stable margins, which is especially important given the market's overall caution.
Key drivers included the growing share of subscription-based services, which provide predictable cash flows, and the successful development of cloud and AI-oriented products. The company continues to enhance its competitiveness despite pressure from industry peers like CrowdStrike and Fortinet.
The positive reaction was amplified by several analysts upgrading their forecasts for the stock. A rising consensus earnings forecast in recent weeks signals potential for further upside.
However, some limiting factors must be considered. According to the VGM score, the stock received weak grades: an "F" for value and an "F" for momentum, indicating a high current valuation and lack of short-term technical overbought conditions.
The stock already reflects a significant portion of future expectations, and further growth will require new catalysts.
Nonetheless, shares remain above both the 50- and 200-day moving averages, supporting the medium-term uptrend. The potential for continued gains exists, but without further positive surprises or market triggers, partial profit-taking is also a possibility.
