Quick overview

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 Dow Jones Industrial Average futures (YM) and the cash index are digesting a major shift in macroeconomic data and corporate earnings.

The market has been caught in a tug-of-war: soft inflation data is paving the way for a more accommodative Fed, while a massive earnings miss from legacy tech giants (specifically IBM’s historic 25% single-day plunge) is putting a cap on immediate upside momentum.

The multi-year daily uptrend channel remains structurally intact, but shorter-term charts show momentum slowing down near the top of the range. The index is currently trading just below its 21-day Simple Moving Average (SMA).

June CPI data came in significantly cooler than expected at 3.5% YoY (against a 3.8% forecast and down from 4.2% in May). This soft reading has slashed the market-implied odds of a July interest rate hike to just 16%, fueling expectations that the Fed is nearly done with its tightening cycle.

 The Q2 earnings season is acting as a double-edged sword. While major financial institutions (including commercial banks) have largely beaten estimates, enterprise technology has hit a major speed bump. IBM’s preliminary Q2 earnings miss wiped out roughly $70 billion in market value on Tuesday, dragging heavily on the blue-chip index and raising questions about broader corporate IT spending.

,Dow futures need to push past the immediate 52,850 resistance zone. If earnings from other index heavyweights (like Johnson & Johnson or Goldman Sachs) please the Street, expect a grind back toward the 53,300 highs. On the downside, keep a close eye on 51,600 —as long as the index stays north of this zone, the structural bull market is still very much alive.