Stocks are trying to hang on to yesterday’s solid gains.
The conflict in Iran continues and has pushed up WTI crude oil above $78/bbl, the highest level since mid ’23. Gasoline and jet fuel have also spiked, up 15% in a week. The longer this goes on, the more inflation concerns will rise.
The US Treasury market is reacting quickly to the inflation risk. The 2-year is up another 5bps, up 22bps in less than a week. The 10-year is up 6bps, +20bps since last Friday. The US dollar index is up today, back above 99 on the higher US yields.
Tech is up modestly today on the strength of , which reported beats top and bottom last night, and gave good guidance. The shares are up 4.5% today (-4.0% YTD, +73.4% LTM). This has taken semiconductors into the green, including NVIDIA. The only other sector in the green is energy, to be expected with crude oil spiking.
The higher Treasury yields are pushing precious metals modestly lower, roughly 1%. is up 5.4%, +1%, +4.2%. Crypto is down today, with Bitcoin down 2.5% to $71.6K, still up 7.3% for the trailing week, -18.1% YTD
The labor market appears more stable than feared, but the talk about all the information jobs at risk from AI replacement is being repeated regularly, good for corporate profits but not for consumer spending.
The negative sentiment may last as long as energy prices are on the rise. Keeping things in perspective, the S&P is down 2.7% from the intraday 7,002 all-time high reached in the last week of January. Only a modest correction in the big picture. Global equities have been down much more in the last week.
For now, the trend remains volatile.
Rising Oil and Treasury Yields Add Pressure Despite Stable Labor Market
