Yesterday most major US indices continued to move higher despite oil breaking back above $100. The S&P 500 closed up 1%, just under Friday’s high, with tech stocks leading to the upside. The NYSE 100 was up nearly 2% on the session. It was a busy day of earnings which continued to be strong. Industrials and financials closed slightly lower. The Dow Jones Transportation index fell over 8%. While airlines were weak, the primary cause was a CAR crash. The short squeeze that drove that stock from ~$150 to $750 in three weeks had the ABS brakes slam on it yesterday, ending down >35%. The stock is declining even more today.

The S&P 500 opened modestly lower after an optimistic, though questionably sourced, report on negotiations brought equities off their lows. The index traded sideways until 1pm, when reports that Iran's Parliament Speaker Ghalibaf resigned from the negotiating team sent the index lower. Then came reports that Tehran’s air defenses were activated, sending equities lower still, but we’re now bouncing on word Israel was not conducting any operations in the region, and that the air defenses were actually just small arms gunfire during regime parades. Nope, not joking. The S&P is off its lows, down about 0.5%.

Equities are seeing a defensive rotation as Iran headlines turned negative. Utilities and Staples are leading, with Energy also higher on oil’s strength. Industrials are also strong, with solid reactions to rail earnings in particular. Discretionary (retail and Travel/Leisure), Comm Services (media giving back some recent strength and META down) and Tech are the laggards. Software is getting smoked as the IGV is sharply lower. On the flip side there have been multiple semi/equipment companies that have put up strong earnings (TXN, LRCX, SK Hynix, STM) and the ICE Semis Index is trading higher.

Commodities are mixed. ICE Brent is back to overnight highs ~$106, after seeing ~$101 earlier. US nat gas is down 5%, weakening into today’s EIA storage report, then continuing lower. Gold is modestly lower, back to testing $4,700 after slipping below its 100d ma ~$4750. Other precious metals are also lower and copper is down as well. The crypto complex is pulling back after yesterday’s rally. Bitcoin has fallen back under its 100d ~$78k. Ethereum is off ~5%.