Good morning,

Coming out of the long weekend most major US indices kept on trucking hitting new all-time highs yesterday. The hopes for a diplomatic resolution in Iran prevailed despite the US conducting “self-defense” strikes. Oil prices fell >2.5% with ICE Brent breaking below $100 and its 50d ma which helped Treasury yields pullback as well. The S&P 500 was up 0.6% closing back over 7,500 while small/midcap indices were up ~1.5%. The strength in memory stocks and to a somewhat lesser extent chips was the big story with Micron surging nearly 20% and clearing a $1T market capitalization following a UBS upgrade (NYSE Semi Index +6.2% and ~90% YTD). The speculative juices were flowing with space stocks surging and strength in other popular thematic trades like nuclear and rare earths. Quantum stocks paused after surging in the previous two sessions.

Futures continued to move higher overnight amidst more tech strength. Futures were pulling back from the overnight highs this morning but jumped after Iran State TV released details of the draft MOU with the US which would include the withdrawal of US military forces and the lift of the blockade while Iran would restore the number of commercial ships moving through the Strait to pre-war levels within 1 month. However, futures have given those gains as there was no mention of enriched uranium and the suggestion of tolling in the Strait, which have been redlines for the administration. The move in S&P futures was reasonably muted up trading up ~0.35% at the highs before pulling back modestly. Oil prices have extended to the downside and were down >5% at the lows but have bounced, ICE Brent trading just under $96.