Overnight trading saw 18 trades result in a net P&L of $-7,267.50, reflecting a 44.4% win rate on the ES and MES contracts. Trader sentiment is being weighed down by an emerging outlook from economists pointing to the likelihood of increased Fed rate hikes, shifting market expectations for the first time since 2023. The prevailing rate forecast aligns with a recent poll showing 78 out of 102 economists anticipate the Fed will maintain its rate in the 3.50% to 3.75% range for the remainder of 2026.

In addition to monetary policy concerns, geopolitical dynamics are also influencing today's open. Tensions rise as Israel has begun evacuating a town in southern Lebanon, a significant movement since the ceasefire, while Iran signals that safe passage through the Strait of Hormuz requires their coordination, following a warning to foreign tankers. Meanwhile, China Southern's $3.62 billion deal for Boeing and productive trade talks between the EU and China are anticipated to impact global market sentiments, particularly for related equities like BA.

As we approach the open, the algos are vigilant in tracking market movements related to these events, especially watching how interest rate sentiments may shift throughout the session. Currently, open positions show a mixed sentiment on ES contracts as traders navigate through this volatile landscape, suggesting a cautious approach in the face of market headwinds.