Iran and the US exchanged fire over the weekend but the strikes were relatively limited. The news caused Brent crude to bounce off Friday’s close, and right before the Open Iranian news sources reported that Iran halted talks with the US to protest continued Israeli operations in Lebanon. That sent oil and yields up further, taking S&P futures off their highs. The cash index opened around unchanged. Equities moved up modestly from there before rates and oil came off their highs after Trump told CNBC he had not heard from Iran that talks were suspended, while Pakistan’s Foreign Ministry said Iran requested mediation to continue. Then, Trump posted that he spoke with both Israeli PM Netanyahu and Hezbollah and that each side won’t attach each other. The S&P is at its highs, up around 0.5%.The equal-weight is about inline and smaller caps are lagging.

Megacap tech is doing a lot of work. 6/11 sectors are down over 1%. Despite some headline-induced volatility oil is up today, pushing Energy towards the top of the sector leaderboard. Tech though is the best performer today as hardware names (ex-INTC and QCOM) see a tailwind from news Nvidia is launching an AI chip for PCs. Dell, HPQ and HPE are up 5-10%. Meanwhile software continues to get its groove back, as the IGV climbs +6%. CRM, ORCL, NOW all up ~10% as Nvidia CEO Jensen Huang dismissed AI disruption fears in his keynote at the Computex conference. In more news, Anthropic announced it has filed confidentially filed for its IPO.

Treasury yields are up 5bps at the front end on the rise in oil, along with the solid economic data. The US Dollar Index is up as well, continuing to trade between 99.0-99.5 over the past two weeks. Oil prices are up but are off the day’s highs. Brent fell below its 50d ma last week, rallied above it earlier today but is now trying to hold it as Iran headlines push the commodity around. US natural gas is down ~4%, giving back some of last week’s rally while European gas climbs 7%. Gold is down about 2%, giving up much of Friday’s gain after tagging its 200d. Copper is outperforming up ~3%. Ag is lower with corn lagging as its weakness since the beginning of May continues. Crypto continues to struggle as Congress tries to move the Clarity Act forward. Bitcoin is down ~3%, hovering above $70k after Strategy announced that it had sold 32 bitcoins to pay its preferred dividend.