Overnight reports continued to discuss the US military preparing for renewed strikes on Iran, but potentially before the mid-terms. The general thinking was this would happen after the US elections. There were also new strikes on tankers in the SOH and reports on ship transits through the Strait falling back markedly. S&P futures traded down but moved off the lows as we approached the Open. The cash index opened down 0.3% but began to climb soon after, but stalled just below 7800. The index retreated, back-filling Tuesday’s gap up. Around noon, President Trump posted that “we will not be attacking Iran at any time prior to the Midterm Elections.” He added that the US is having productive discussions, and that Iran will not have a nuclear weapon. Stocks jumped initially back up to ~7800 but quickly gave it all back. We then fell further after the FT reported that OpenAI’s annualized revenues are $20B less than previously thought ($50B versus $70B). That took the Tech sector lower right away.

Energy is leading along with Consumer Staples, which accelerated to the upside as Tech weakened on the OAI news and yields continuing to come in. That has also helped Utilities and REITS strengthen. Tech is lagging as semis get hit (DRAM -5%, ICE Semis -4%). Software is mixed but ORCL’s 5% decline is weighing on the group. Yields have been interesting today. The long-end has been moving lower throughout the morning and the short-end then began to catch up. Overall the curve has flattened with the 2y down 3bp and 10/30y down 5-6bp.

Brent crude is up 4%, a little off its highs. US natural gas is lower. The inventory build was higher than expected and rose 20Bcf from last week’s build. Metals are mixed. Gold is modestly higher, hovering ~$4150. It tested $4100 at the lows yesterday. Silver is down ~2% and copper has moved lower as well. Ag is mixed ahead of tomorrow's WASDE report. Bitcoin and Ether have weakened significantly, now down 3-6% following weakness yesterday. Bitcoin is testing its 50d ma ~$80.7K while Ether broke below its 50d ma.