Softer stock futures indicate investors are on a bit of a knife edge, following the first-back-to-back gains for the S&P 500 SPX, +1.30% and Dow DJIA, +0.98% since recent market upheaval began. “There’s nothing like a banking crisis to kick-start an equity rally,” adds O’Rourke.

Onto our call of the day, which sees some silvery linings out there via one sector that few may be paying attention to right now. In a note to clients, Fundstrat’s head of technical strategy Mark Newton, says healthcare has “suddenly come to life,” a good sign for broader markets.

Before we get into that, he sees a “moment of truth,” nearing for the S&P 500. “It’s thought this lies at 4,043 up to 4,078, or 3/6/23 highs,” he said. The index closed above 4,000 for the first time since March 6 on Tuesday.

“Healthcare is now higher by +1.43% over the past week in equal-weighted terms RYH, +1.23%, while higher by more than +1.0% as per the SPDR S&P Healthcare ETF XLV, +0.61% compared to equal-weighted S&P 500 being higher by +0.20%,” says Newton, calling it a “welcome start to outperformance.”

He says his relative chart of healthcare versus the S&P 500 below shows a “steep ascent” has begun. “Since healthcare is the second largest sector in the S&P 500 by market capitalization at nearly 12%, and larger than financials, seeing this sector start to advance is a good sign for market bulls.”

However, much is on the line here as Newton says given the sector’s failed prior breakout attempt into year-end , healthcare needs to exceed those recent gains before anyone can start thinking it’s headed higher than the broader market.

While the market was glued to the fate of regional lenders, medical devices broke out as a subindustry group on Wednesday, and biotech is setting up for something similar, said the strategist, who notes the iShares Medical Devices ETF IHI, +1.38% has officially exceeded its early February downtrend.

“This is a bullish development and bodes well for this part of healthcare to start showing better technical strength than what’s been seen since early February,” he said. A test of the highs seen that month are likely, with $56.16 the big resistance level to watch on that ETF, said Newton, who points to his favorite liquid names within it as IDEXX Laboratories IDXX, +2.51%, Boston Scientific BSX, +0.02% and TransMedics TMDX, +0.73%.

He also notes some bullish technical action recently for Ominicell OMCL, +4.00%, Shockwave Medical SWAV, +4.02%, Teleflex TFX, +3.18%, Bruker Corp. BRKR, +1.62% and Tandem Diabetes TNDM, +5.05%, and sees more strength for those in coming days and weeks.

Newton says biotech is also close to breaking out, but needs a bit more umpfh given it has lagged behind the tech move seen over the past month. So, for example, any move back over $128 in the iShares Biotechnology ETF IBB, +0.12% would help put the sector on better footing. He says if the ETF reaches that level, he’d expect a rally back to $139.

Names to consider: Regeneron Pharmaceuticals REGN, +0.07%, Vertex Pharmaceuticals VRTX, +1.24%, Amgen AMGN, -0.75% and Myriad Genetics MYGN, -1.52%.

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The markets

U.S. stock futures  ES00, -0.03% YM00, +0.04% NQ00, -0.15% are on the fence as a Fed decision nears. The yield on the 10-year Treasury note TMUBMUSD10Y, 3.629% is a bit lower at 3.597%, while oil prices CL.1, -0.63% are down about 0.7% on the heels of a bounce.

The British pound GBPUSD, +0.45% shot higher against the dollar after an unexpected 10.4% surge in inflation, one day ahead of a Bank of England policy meeting.

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The buzz

The Fed decision is front and center for markets, the toughest to call since 2008, say some. Some 73% expect a quarter-point move, while the rest say the central bank will do nothing. The economic calendar is otherwise empty.

On the heels of a 30% rally on Tuesday, First Republic FRC, +29.47% shares are up 5% premarket trading, on news the struggling bank has hired advisers to navigate its crisis.

Read: 24 bank stocks that contrarian bottom-feeders can feast on now

Shares of GameStop GME, +4.62% are up nearly 50% after the meme-stock favorite retailer reported forecast-beating profit and sales. And that boat is lifting all meme tides, with AMC Entertainment AMC, +3.28% and its preferred equity units, known as APEs APE, +8.82%, each up 10% and Bed Bath & Beyond BBBY, +0.98% up 11% ahead of the open.

Nike NKE, +3.64% stock is slipping after the athletic-gear maker gave a downbeat outlook for gross margin.

China has reportedly granted emergency use for its first homegrown mRNA COVID vaccine.

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