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U.S. stock futures moving to the upside this morning after a sharp sell-off on Monday amid lingering uncertainty from trade to President Trump's growing attacks on the Federal Reserve. Here to break down what this all means for the stock market is our own Josh Schafer. And it's really all of it encapsulated as two major things that the markets are clearly latching onto, and most notably it seems like from our guests yesterday was just how much the Fed was, or the president was focusing in on the Fed at the same time where there's still lingering uncertainty that we're hearing in earnings calls and from CEOs just about what tariff policy will look.

Yeah, Brad. I mean, I think what you take sort of yesterday's discussion about President Trump potentially trying to fire Fed chair Jerome Powell. It's just another pin in the bucket, right? Another issue that we can sort of add to the stock market story right now. I thought Stuart Kaiser from Citi put this well in his note after the trading day saying that the path of least resistance is lower. In absent good tariff news, you have Fed headlines that just set the market in that direction kind of before the day started, right? Then you take today, for example, we didn't really have any negative headlines overnight, so there was nothing really sort of set us in that direction, but I think largely what we learned yesterday and what rate strategists sort of took away from the action that we saw was if there is any concern about Chair Powell being removed from his seat, the trade is going to be the sell the U.S. trade we've been talking about, right? It's probably higher or higher yields. It's probably a weaker dollar. And so now you know sort of what that trade looks like. And if this conversation continues, that's the kind of action you can expect. But I thought Ed Yardeni had a great point as he was sort of breaking down the different things at play. He said everyone's on edge. And then he added, I think about five or six different things that are keeping us on edge, right? You have tariffs. You have tariffs impact on earnings. You have tariffs impact on the economy and the recession concerns. But now let's throw in potentially the Fed chair getting fired, which basically never happens into that. That's another thing that can keep us on edge, right? And so at this point, with the market where it's at, trading significantly lower than it has been over the past couple years, right, we've had this big drawdown, you're in this choppy bad market right now, any incremental bad news, I think we have a good idea where that's going to send stocks at this point.

And things aren't working the way they're supposed to. The traditional correlations between stocks, bonds, currencies are breaking down before our eyes. And one thing I wonder too, Josh, that we've talked a lot about is that stocks were already under a little bit of pressure prior to these tariffs and the so-called liberation day. How are your sources parsing out the moves to the downside we're seeing in the market right now in terms of what is policy uncertainty versus what is a continued unwind of some of those values?

Yeah, I think we're going to get an even closer look at that over the next two weeks, right, Maddie? So if you look at a stock like say Netflix, Netflix was one of the only stocks, for most of the day, we had a little bit of a rally at the end of the day, but it was one of the only stocks in the Nasdaq 100 that was up. Why was Netflix up yesterday? They had very good earnings on Thursday. The market was closed Friday, so that was its first trading session after earnings, right? That had been a stock that people loved. It was near an all-time high before all of this tariff uncertainty. It came down with the market, but then bounced back up on fundamentals. So the question being, can that happen to some of these other stocks, right? You mentioned we were at a point in the market where yes, tech was very overvalued. There was concerns about growing competition, Canada, and AI, right, and sort of competition from other countries, the spend there. So can those companies explain that story? Can Alphabet explain that story on Thursday and make that more clear for investors and bring that stock back a little bit? I think you're going to start to see perhaps individual moves and get back to a little bit of the fundamental, fundamental story. But then again, zooming back out to the macro, most strategists right now are sort of telling me you need this uncertainty to go away. If that's what started the drawdown, if the drawdown is spawned by policy uncertainty and spawned by tariffs, more clarity on tariffs is kind of the only thing that can bring you back from an index perspective.

I thought the candlesticks were very telling yesterday. And yeah, for everybody out there that just like loves the line graphs and loves the mountain charts here, take a look at the candlesticks from yesterday, because I think that was very telling as well. You had a lot of down activity throughout much of the session, and it really wasn't until the last 45 minutes that you actually saw some buying start to overtake much of the sentiment. So it really kind of resumed the, all right, well, we've pulled back so much even during this session. Does it seem like there's some dip buying opportunities? And that's where at least a few of those bids seem to enter into the fray, but not a wave of it to really erase much of the decline.

No, you haven't seen a wave of buying really at all, Brad. It was interesting you pointed to that action yesterday. The move, it feels like, has generally been lower into the close over the past two weeks. So it was interesting to see us actually come off the lows for once. That has not really been the trend. But overall, yeah, I mean, it seems like the bias right now is still sell, ask questions later. There weren't a lot of buyers. There's also, there was a little bit of a low volume day in the market yesterday, right? It was a holiday for some folks. A little bit less busy. Our Julie Hyman was pointing that out, so you normally see some wider spreads and bigger moves. So be interesting to see how we trade for the rest of the week as we all come back, and I'm sure there'll be more tariffing.

I had to be the nerd to bring up the candlesticks here early on in the day.

We have no Jared Blickry this week, someone's got to bring them up, Brad.

Yeah, sure. Somebody's got to talk about these candlesticks.

Very true. Josh, thank you so much. Appreciate it.