"History tells us the stock market typically ignores geopolitics. Still, some on Wall Street were quick to point out that the closure of the Strait of Hormuz could complicate matters as oil prices have exploded higher, and some feel a protracted closure could push oil to $100."
"Yields were higher across the entire Treasury curve, and the buy-the-rumor-sell-the-news axiom could not be more relevant than on Monday. Bond traders and investors could see the safe-haven run coming from a mile away, as yields plummeted over the last few weeks with steady buying, but with the world not coming to an end, at least this week, sellers emerged to take profits."
"As expected, prices across the energy complex exploded higher after the attack on Iran. While they leveled off as the day progressed on Monday, it's a solid bet that, until the Strait of Hormuz is reopened and the fighting slows, prices will remain elevated, as evidenced by this morning's spike, with both major indices up almost 9%."
Major stock indices recovered from early Monday losses through buy-the-dip buying, with the Dow closing down 0.13%, while the S&P 500 and Nasdaq closed modestly higher. The Russell 2000 led performance, up 0.82%. Geopolitical tensions drove oil prices sharply higher, with Brent Crude up 7.23% and West Texas Intermediate up 6.36%, raising concerns about potential $100 oil if the Strait of Hormuz remains closed. Treasury yields increased across the entire curve, with the 10-year note at 4.04% and the 30-year bond at 4.68%, as profit-taking emerged after weeks of safe-haven buying.
#oil-prices-and-energy-markets #geopolitical-tensions-and-market-impact #treasury-yields-and-bond-markets #stock-market-recovery-and-indices-performance
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