Market Prep: MU Earnings & FOMC

$MU $QQQ $SPY $COP $NOK $COIN $WDC $AXTI

Hello Traders,

The market is bracing for the FOMC, where Jerome Powell must choose between combatting soaring energy costs and supporting a softening labor market. Stagflation fears persist as U.S. diesel prices skyrocket at their fastest pace in years, crossing the $5 per gallon mark due to supply chain pressures.

Gasoil futures remain anchored at highs not seen since the onset of the Russia-Ukraine war in 2022, making it nearly impossible for the Fed Chair to maintain optimism regarding near-term rate cuts.

The market setup for the S&P500 SPY 0.00%↑ is leaning toward the downside. We’re seeing a large cluster of protective bets at the $660 level. Since the market was pricing in 1-2 rate cuts for 2026 from the beginning and tomorrow there’s a less than 1% probability of a rate cut, meeting could be a nothing burger, unless Fed will stay ‘hawkish’ (keep rates high or talk tough), due to higher energy prices. This explains why there is very little interest in buying calls above $680 right now.

In addition to the FOMC volatility, Wednesday serves as a major fundamental catalyst for the semiconductor space as Micron (MU) provides new fiscal guidance. With HBM capacity reportedly booked through 2026, the stakes for this report couldn't be higher. To prepare, let's pivot to the immediate positioning in SPY and QQQ, where gamma clusters are currently 'pinning' the indices ahead of these dual-threat events