US equities are following-through on yesterday’s gains and were at their best levels before reports out of Israel that negotiations between the US and Iran are not progressing well. That has pushed equities off their highs, though still up ~0.5%. Other reports indicate that plans for escalation are underway if negotiations fail, though that isn’t too surprising and probably comes under the heading of “War Planning Best Practices”. Meanwhile, Iranian President Pezeshkian is expected to release a letter “to the American people in a few hours”. Small and mid-caps are slightly outperforming and the equal-weight is lagging a bit with Growth>Value.

The leader board looks much like yesterday, with tech and cyclicals at the top. Industrials are strong again, across-the-board. Comm Services is also a leader as Google and Meta continue their strength from yesterday and bounce off oversold conditions from the past two weeks. Tech is slightly outperforming. Semis in particular are strong and outperforming software which is trading around flat. Energy and Staples are the only sectors lower but Energy stands apart, with the major E&Ps down ~5%. Staples is seeing most names lower and some negative earnings reactions.

Economic data was supportive with generally solid ADP, Retail Sales and ISM prints. Treasury yields are flat, and the US Dollar Index is lower, with the Pound seeing outsized strength. Brent crude is down again and trading just above $100, with the June contract now the front-month. Both API and EIA inventory data showed builds, which were above generally unchanged estimates. Precious metals are higher, with gold leading. Both silver and gold regained their 100d ma. Crypto is modestly higher. Bitcoin remains below its 50d ma ($68k vs $72k) while Ether broke above it earlier this week.