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% with weakness in airlines. However, the primary driver of the recent move higher and yesterday’s decline was the short squeeze in Avis. Yesterday, the CAR crashed with the stock dropping by >400pts from its intraday high to end down >35%.

Futures have been trading lower overnight as the maritime tensions continue and seem to be picking up. It has also been a very busy 24 hours of earnings. The software vs. semis trade will be very much back in focus. Service Now and IBM are both trading off >5% after earnings, the former noted that several large deals in the Middle East had been delayed . With the recent focus on software and private credit there are also reports that Thoma Bravo is about to turn over Medallia, the firm it bought in 2021 for >$6B, to creditors - the total debt on the company currently stands ~$3B (this has been ongoing). On the flip side there have been multiple semi/equipment companies that have put up strong earnings (TXN, LRCX, SK Hynix, STM). Futures have come off the lows after a report from CCTV that there could be a breakthrough in Iran/US talks but have just turned lower again after President Trump ordered the Navy to shoot and kill any boats laying mines. S&P futures are currently down ~0.3% after trading down nearly 1% at the lows overnight. ICE Brent traded up to ~$106 overnight and down to ~$101.25 on the CCTV headlines but has now bounced back to ~102.75.