Markets:
- WTI rose $5.59 to $100.07
- The Standard & Poor’s 500 index fell 1.7% to 6,368 points
- Gold rose $135 to $4,513
- US 10-year bond yields rose 3.6 basis points to 5.00%.
- Bitcoin falls 4.2%
- The US dollar is advancing, and the British pound is lagging
It has been ugly for most markets today, with the exception of gold and oil. The Nasdaq fell to a six-month low as war fears continued throughout the day. The positive backdrop of Trump extending the deadline to strike energy facilities yesterday ultimately failed. The idea is that a 10-day extension will add more pain and the deal does not look promising.
As oil prices rose steadily, this led to higher yields and lower stocks. Compounding the pain in stocks is a sell-off in technology stocks led by some of the highest releases this year and last. This appears to be a deleveraging move as uncertainty surrounding the economy increases. Early in the conflict, there was confidence that this would end on Trump’s 4-5 week timeline, but we just completed week 4, and today Rubio said another 2-4 weeks.
Late in the day, the veracity of the report on the Houthis entering the war was called into question. US negotiator Steve Witkoff said he believes there will be meetings with Iran this week and that Trump wants a peace agreement. I think it will all depend on what Trump brings to the table. In an optimistic world, there may be a way for Iran to give up nuclear materials in exchange for peace and relief from sanctions. With this, Trump can also claim to have prevented Iran from obtaining a nuclear weapon.
It is also possible that the market is fearful of the US escalation over the weekend. The report about the US not using ground forces had little impact on the market, with everything quickly dismissed as potential misinformation.
In terms of engines, the MAG7 looks like this:
- Meta (META): decreased by 4.0%
- Amazon (AMZN): down 4.0%.
- Microsoft (MSFT): decreased by 2.5%.
- Alphabet (GOOGL): Decreased by 2.5%
- NVDA (NVDA): decreased by 2.2%
- Tesla (TSLA): down 2.8%
- Apple (AAPL): down 1.6%.
