The Iran situation deteriorated overnight as the US carried out airstrikes and President Trump said the ceasefire was over as far as he was concerned. S&P futures were down >1% at the lows but the cash index opened down a modest 0.4%. The S&P 500 weakened to session lows shortly after the open, down around 1%, but found support at the 50d ma (7415). We’re back around opening levels currently. The equal-weight is lagging, down about 1%, as are small caps. Tech began to strengthen, pushing the S&P off the lows, while Energy lost some momentum. Semis are leading the way as the ICE Semi Index is up ~2%. The hyperscalers are seeing a modest pullback from recent gains. Energy is the only other sector with significant gains, but it’s come off the highs as Brent came back in from its highs ~$80.50.

Treasury yields are up about 2bp across the curve, a modest increase given crude’s move. Today’s 10yr auction was strong, stopping through by 0.6bp. The FOMC minutes at 2pm will be widely read. They could provide interesting insight after Chair Warsh stonewalled the press at his first press conference, though much is likely dependent on his various Task Forces that will reporting back over the next few months. The USD Index is flat, having also pulled back from a modest move higher, and back under 101.

Brent crude is up 6% but off its highs and back below $80. This morning’s EIA crude inventory data showed an unexpected build. The metals complex is under pressure. Gold is down 2% while silver and other precious metals are down 5% despite a rather modest move in yields and the Dollar. Ag is pulling back from recent gains. Crypto’s recent signs of life are turning lethargic again today. Bitcoin is down over 2% to ~$62k while Ethereum is pulling back 4% to ~$1,750.