S&P futures traded around unchanged overnight after recovering from a quick bout of selling on news of Iranian attacks across multiple Middle East targets including a large strike on Kuwait’s international airport. The index opened slightly lower but quickly fell to its lows. Aside from the overnight attacks, part of that weakness could be the Trump administration’s proposed “forced labor tariffs” of at least 10% on 60 nations that would partially fill in the hole left by the Supreme Court striking down IEEPA tariffs in February. While the tariffs were not necessarily out of the blue, they could reignite trade uncertainty at a time when supply chains are already reeling from the Iran war.

The S&P is down ~0.5% while the equal-weight is also lower but slightly outperforming. Small caps are underperforming with yields and oil higher. The nervous energy is understandable as we’re only a few hours away from Tip-Off for the Knicks in Game 1 of the NBA Finals. Energy is the leading sector, following the commodity higher. The defensive Staples is also outperforming, as is Healthcare and Real Estate despite the rise in yields. Tech and Discretionary are the laggards along with Financials.

Yields are up ~5bp across the curve on the geopolitical flare ups. NY Fed President Williams said “I don’t see any need to raise or lower interest rates right now.” The US Dollar Index is up and back to 99.5.

Crude is up ~2% with Brent moving back above its 50d ma. Metals are lower across the group. Gold is down about 1% but outperforming others (silver, copper -2%, platinum/palladium -4%). Copper saw some volatility after US announced modifications to current tariff rules on the metal as well as steel and aluminum, starting June 8. The crypto majors continue to face sustained pressure. Bitcoin is down ~2% and approaching $65k while ETH failed to hold $2k and is sliding toward $1800.