“The Houthis, the Iran-backed armed faction in Yemen, said they would impose a blockade on Saudi ships entering and leaving the Red Sea, threatening to open a new front in the Middle East conflict and raising the pressure on volatile global energy markets.
Higher oil prices. Greater odds of an interest rate increase from the Federal Reserve.
Traffic in the Strait of Hormuz plummeted after Iran’s attack on a Cypriot-flagged container ship on Saturday set off an exchange of strikes with the United States. Just 14 ships passed through the waterway on Sunday in both directions, the fewest in a month, according to Kpler, a maritime data firm. Of those ships, only three were tankers exiting the Persian Gulf laden with crude oil, chemicals or other commodities, and all three were shadow or sanctioned vessels. Before the start of the war in late February, an average of more than 130 vessels transited the Strait daily. In mid-June, when the United States and Iran signed a preliminary agreement to reopen the strait, traffic spiked. In the seven days starting June 20, nearly 400 ships moved through the strait, the highest number in a one-week period since the war began. But hopes for a recovery in shipping quickly faded with renewed attacks on ships by Iran.
Investors must hedge any further S&P 500 rallies and brace for a potential “three-wave correction” in the next few months, according to the head of technical research at Bank of America Corp.
The S&P 500 Index has been on tear, rising nearly 17% since March lows, but the rally has been showing signs of exhaustion since the U.S. benchmark hit its most recent peak on June 2, BofA’s Paul Ciana wrote in a Thursday research note. He says the S&P 500 could drop as low as 6,850, a roughly 7.6% decline from current levels.
The index closed at 7,499 today, June 30.
“Summer roadmap is a three-wave correction,” Ciana wrote in the note. “The post-ceasefire rally is becoming more volatile as correction risks build,” Ciana said, Price action looks “stretched” and momentum is deteriorating, which should warrant a “defensive stance” for July through September. That’s not exactly the consensus on Wall Street.
I think neither of the AI companies looking at the next $1 trillion IPOs want a price war right now. But that may be exactly what they’re going to get anyway. For two reasons.
The dollar, seen as a safe haven asset, fell by the most in more than a month as President Donald Trump vowed of progress on a deal to end the war. The day before President Trump had vowed to expand the war by taking over Iran’s oil infrstrucure on Kharg Island. The Bloomberg Dollar Spot Index dropped 0.3% Thursday afternoon in New York. It was the currency’s worst one-day performance since May 6. The President’s remarks also led to a decline in oil prices and a surge in U.S. Treasuries. Brent crude fell 4.28% on the day. The yield on the 10-year Treasury fell 9 basis points to 4.46%
The high-profile group of chipmakers such as Nvidia (NVDA) and Micron Technology (MU) that sold off on Friday’s stronger than expected jobs report led gains today, climbing 5.6% after the biggest selloff since 2020. Their rebound was enough for the S&P 500 to resume its advance, though most of the the stocks in the index fell. The S&P 500 gained 0.29% today. The NASDAQ 100 gained 1.58%. Declining issues outnumbered advancers by a 1.01-to-1 ratio on the New York Stock Exchange. There were 129 new highs and 162 new lows on the NYSE. On the Nasdaq, 2,746 stocks rose and 2,142 fell as advancing issues outnumbered decliners by a 1.28-to-1 ratio.The S&P 500 posted 13 new 52-week highs and 7 new lows while the Nasdaq Composite recorded 105 new highs and 164 new lows. What most interests me about today’s comments onthe bounce is how many talking heads on Wall Seeet called Friday’s selling a “reset,” or a “correction.”
The economy added 172,000 jobs in May, more than economists had expected. The unemployment rate stayed at 4.3%. With revisions, March and April added 93,000 more jobs than previously reported. That puts average job growth in 2026 at about 114,000 per month, much stronger than the 10,000 average last year. That’s much faster than the rate at which people have been coming into the labor market because the Trump administration has squeezed net immigration to near zero.
Even though we don’t know the timing and scope–or even the existence–of any deal, investors watching the financial market’s reaction to Iran peace news over the last few weeks can begin to put together a trading strategy for the end of the war.
A majority of Federal Reserve officials at the Federal Reserve’’s April 29 meeting warned that the central bank would likely need to consider raising interest rates if inflation continued to run persistently above their 2% target.
Friday it was “Never mind.” Chip and AI-related stocks were in the red on Friday after talks between the U.S. and China did not yield any detailed deal around chips. The tech-focused Nasdaq Composite (COMP:IND) fell around 1.74%. At the same time, the benchmark S&P 500 (SP500) slipped about 1.22%. The blue-chip Dow (DJI) declined around 0.84%. On Thursday, in contrast, it had been all hope and cheer. Nvidia (NVDA) climbed 2.6% on news that the company would be able to export its H200 chips to China. Broadcom (AVGO) gained 5.8% on general AI/technology optimism. Ford Motor (F) surged 6.9% on news that the company was planning a move from making batteries for electric vehicles to making utility-scale batteries for the grid. I think the extreme gains on Thursday and the big losses on Friday tell us something important about where we are in this rally.
Government bond markets tumbled around the world today, Friday, May 15. yields surged from Japan to the United States on fears that price shocks from the Iran war will force central banks to raise interest rates to contain the impact. The rout was led by longer-dated bonds that are the most vulnerable to accelerating inflation, sending 30-year yields toward their highest since 2023. U.S. 10-year yields rose more than 11 basis points to peak just shy of 4.60%, capping the biggest weekly jump since President Donald Trump’s tariffs threw markets into a tailspin in April 2025. The yield on the 30-year Treasury closed at 5.12%, above the psychologically important 5% level. The yield on the 30-year Treasury is now up 22 basis points in the last month.
Earnings for American workers grew by less than expected in April, with a 3.6% growth in hourly earnings from a year earlier. The growth in hourly earnings was softer than the 3.8% increase that economists expected. This week’s Consumer Price Index (CPI) for April, due on Tuesday, May 12 before the market opens in New York, will tell us if workers are actually losing ground to inflation.
