Last week the S&P 500 traded in a reasonably tight range, consolidating just over its 50d moving average. It was a definitely a summer trading vibe, with little economic data and markets looking ahead to the earnings season kicking off this week. The S&P ended less than 1% from another ATH. Technology provided most of the gains with the NYSE 100 index closing the week up ~2.5%. However, most other major US indices ended the week with slight losses and there was a lot of movement under the surface as oil prices and yields moved higher as the ceasefire fell apart.

The weekend saw the US and Iran exchange fire multiple times. That drove oil prices higher again. Asian markets saw pronounced selling pressure overnight, especially in the Tech names and South Korea. The S&P 500 opened down 0.4% and has moved steadily lower, currently down almost 1%. The equal-weight is out-performing however and is almost flat as, like the rest of the world, the weakness is centered in Tech. Small caps are trading around inline. The NYSE Semis Index is down 5%, and the memory names are leading that fall as the DRAM ETF gets hit for 10%. The Hyperscalers are mostly higher though as that divergence continues. Energy is easily the leading sector but 6/11 are in the green. The defensive Staples and Utilities are among the leaders

Ahead of tomorrow’s CPI report Fed Governor Waller spoke today with some hawkish comments. He said a rate hike should be on the table if this week’s CPI comes in hot. He included this line: "Sternly staring at inflation until it melts before our withering gaze is not an option.” Fed Chair Warsh will testify before Congress tomorrow. Treasuries are up 4-6bp across the curve, following oil higher, and that’s also strengthening the Dollar against the major currencies.