Markets:
- WTI crude oil up $5.59 to $100.07
- S&P 500 down 1.7% to 6368
- Gold up $135 to $4513
- US 10-year yields up 3.6 bps to 5.00%
- Bitcoin down 4.2%
- USD leads, GBP lags
It was an ugly one for most markets today, with the exception of gold and oil. The Nasdaq fell to a six month low as war worries extended throughout the day. The positive backdrop of Trump extending his deadline to strike power facilities yesterday ultimately failed. The thinking is that the 10 day extension will add more pain and that a deal doesn’t look promising.
As oil steadily climbed it pushed yields higher and equities lower. Compounding the pain in stocks is an intensifying selloff in tech stocks led by some of the highest flyers this year and last. That looks like a deleveraging move as the uncertainty around the economy grows. Early on in the conflict, there was trust this would wrap up in Trump’s 4-5 week timeline but we just completed Week 4 and Rubio today said 2-4 more weeks.
Late in the day, the report about Houthis entering the war was questioned. US negotiator Steve Witkoff said he thinks there will be meetings with Iran this week and that Trump wants a peace deal. I guess all that is going to depend what Trump puts on the table. In an optimistic world maybe there is a way Iran gives up nuclear material in exchange for peace and sanctions relief. With that, Trump could also claim he stopped Iran from getting a nuclear weapon.
The market is also likely fearful of a US escalation over the weekend. The report about the US not using ground troops barely had an effect on the market as everything is quickly discounted as possible mis-information.
In terms of movers, the MAG7 looks like this:
- Meta (META): down 4.0%
- Amazon (AMZN): down 4.0%
- Microsoft (MSFT): down 2.5%
- Alphabet (GOOGL): down 2.5%
- Nvidia (NVDA): down 2.2%
- Tesla (TSLA): down 2.8%
- Apple (AAPL): down 1.6%
