After declining 3% over Thursday and Friday’s sessions, US equities were looking to bounce today as we approach the end of Q1 tomorrow. S&P futures were up ~0.8% nearing the Open, steadily climbing throughout the overnight session- probably taking inspiration from UConn’s incredible comeback/basically buzzer-beater against Duke yesterday. However, early gains were immediately faded as the index traded back down to just above Friday’s close before bouncing back to ~6410, twice. We may not get a third try, as the S&P is now making its lows of the day, down 0.2% as more attacks are reported in the Middle East. The equal-weight is inline while Small and Mid-caps are seeing more pressure. There’s a divergence in small caps as the Russell 2000 trails the S&P 600 (profitable small caps) by ~70bp.

A global bid for sovereign bonds helped equities notch early gains as yields fell. Financials are the best performers today, up over 1% while the other yield-sensitive sectors Real Estate and Utilities are also up ~1%. Utilities are broadly higher. The AI ecosystem is weak- ICE Semis down 4% and electrical infra, construction and energy/data center developers are lower. However software is seeing broad gains. All of this is putting Industrials and Tech at the bottom of the rankings today. Consumer Staples is also among the leaders as food/beverage and the big retailers see strength. Discretionary is outperforming the index but lagging Staples. Travel & Leisure is mostly higher as are retailers. Several retailers will be reporting earnings tomorrow, including NKE, JILL, RH and PVH.

Treasuries are bid this morning, pushing yields down 10bp out to the 10y and helping put a floor under equities, for now. The US Dollar Index is up modestly despite the yield move, as global rates fall overall. The yen is an outlier as it strengthened against the Dollar after verbal intervention ~160. Brent and WTI are diverging today, with Brent around unchanged and off its high while WTI jumps 4%. Precious metals are seeing a modest bounce.