STRAIGHT FROM THE TRADING FLOOR
by Michael P. Reinking, CFA - Sr. Market Strategist
Published on 7/8/26 (a/o 9:00 am)
Good morning,
Yesterday, there was a continued momentum/AI unwind leaving major indices in the red. The S&P 500 closed down 0.4% ending the day off of session lows as mega-cap tech stock bounced while the AI-capex beneficiaries were under pressure. Semi and memory stocks were down >5% despite the strong Samsung earnings report overnight highlighting the high bar ahead of earnings season. Oil prices and Treasury yields moved higher as shots were fired at multiple ships in the Strait. Late in the day the Treasury reinstated sanctions on Iranian oil which sent energy stocks higher into the close. Outside of energy, which was up 3%, healthcare and other defensive/yield-oriented sectors ended with gains. The momentum unwind left not only semis, memory and other AI adjacent stocks in its wake, but other more speculative themes also moved sharply lower including rare-earths, robotics, space and quantum.
The US carried out airstrikes in Iran overnight, but US equity futures were only trading modestly lower as European markets opened. However, ~4:00 during a press conference at the NATO summit President Trump said as far as he was concerned, the ceasefire was over but left the door open a smidge for a diplomatic resolution saying negotiators could continue to talk even though he thought it was a “waste of time”. The comments triggered the typical risk off conflict flows however, the absolute moves are somewhat muted as markets continue to discount a significant escalation ahead of midterms and don’t want to be fooled again by the escalate to deescalate playbook. S&P futures were down >1% at the lows but have cut those losses about in half. Oil prices are holding the bulk of the rally with ICE Brent reclaiming its 200d ma trading up ~5% at ~$78. Treasury yields initially jumped 3-4bps but have pulled back only up 1bps across the curve while the USD index moves modestly higher trading just under $101.
The only economic data on the calendar is wholesale inventories. However, this afternoon there is a 10yr auction and the FOMC Minutes will be released. The minutes could provide some somewhat interesting insight after Chair Warsh stonewalled the press.
With the exception of the Hong Kong Hang Seng which closed up 3% after the large cap tech stocks bounced back, global markets were under pressure overnight. The tech weakness continued to weight on other Asian markets with the Nikkei falling 2%.The Kospi was off ~5% and has now entered into a technical bear market after declining 20% from the all-time high hit on 6/19. In China tech stocks rallied after there were reports that the government is considering restricting overseas use of its top AI models while there continue to be reports that DeepSeek and Zhipu are developing their own chips. European indices extended losses after the Iran comments and are down 1-2%. The weakness is broad based with energy stocks pretty much the only green on the screen.
We discussed oil prices above potentially helping on the product side of things according to Bloomberg China have approved the export of 1.3ml tons of gasoline, diesel and jet fuel in July lifting a ban that has been in place since March. US natural gas prices are up ~1% while prices in Europe are up ~3% extending yesterday’s >5% move higher. The metals complex is under pressure down 2-5%. Ag is modestly higher holding recent gains. Crypto which had started to show some signs of life recently is back under pressure. Bitcoin is down ~2% at 62k while Ethereum is pulling back >3% to ~1,750.
Pretty quiet on the corporate headline front.
US:
Yesterday, there was a continued momentum/AI unwind leaving major indices in the red. The S&P 500 closed down 0.4% ending the day off of session lows as mega-cap tech stock bounced while the AI-capex beneficiaries were under pressure. Semi and memory stocks were down >5% despite the strong Samsung earnings report overnight highlighting the high bar ahead of earnings season. Oil prices and Treasury yields moved higher as shots were fired at multiple ships in the Strait. Late in the day the Treasury reinstated sanctions on Iranian oil which sent energy stocks higher into the close. Outside of energy, which was up 3%, healthcare and other defensive/yield-oriented sectors ended with gains. The momentum unwind left not only semis, memory and other AI adjacent stocks in its wake, but other more speculative themes also moved sharply lower including rare-earths, robotics, space and quantum.
The US carried out airstrikes in Iran overnight, but US equity futures were only trading modestly lower as European markets opened. However, ~4:00 during a press conference at the NATO summit President Trump said as far as he was concerned, the ceasefire was over but left the door open a smidge for a diplomatic resolution saying negotiators could continue to talk even though he thought it was a “waste of time”. The comments triggered the typical risk off conflict flows however, the absolute moves are somewhat muted as markets continue to discount a significant escalation ahead of midterms and don’t want to be fooled again by the escalate to deescalate playbook. S&P futures were down >1% at the lows but have cut those losses about in half. Oil prices are holding the bulk of the rally with ICE Brent reclaiming its 200d ma trading up ~5% at ~$78. Treasury yields initially jumped 3-4bps but have pulled back only up 1bps across the curve while the USD index moves modestly higher trading just under $101.
The only economic data on the calendar is wholesale inventories. However, this afternoon there is a 10yr auction and the FOMC Minutes will be released. The minutes could provide some somewhat interesting insight after Chair Warsh stonewalled the press.
- US 2yr +0bps to 4.20%, 5yr +1bps to 4.30%, 10yr +1bps to 4.57%, 30yr +1bps to 5.07%
- USD index: +$0.20 to $100.98
With the exception of the Hong Kong Hang Seng which closed up 3% after the large cap tech stocks bounced back, global markets were under pressure overnight. The tech weakness continued to weight on other Asian markets with the Nikkei falling 2%.The Kospi was off ~5% and has now entered into a technical bear market after declining 20% from the all-time high hit on 6/19. In China tech stocks rallied after there were reports that the government is considering restricting overseas use of its top AI models while there continue to be reports that DeepSeek and Zhipu are developing their own chips. European indices extended losses after the Iran comments and are down 1-2%. The weakness is broad based with energy stocks pretty much the only green on the screen.
We discussed oil prices above potentially helping on the product side of things according to Bloomberg China have approved the export of 1.3ml tons of gasoline, diesel and jet fuel in July lifting a ban that has been in place since March. US natural gas prices are up ~1% while prices in Europe are up ~3% extending yesterday’s >5% move higher. The metals complex is under pressure down 2-5%. Ag is modestly higher holding recent gains. Crypto which had started to show some signs of life recently is back under pressure. Bitcoin is down ~2% at 62k while Ethereum is pulling back >3% to ~1,750.
Pretty quiet on the corporate headline front.
- Apple and Broadcom reached a new $30B chip deal (both stocks around unchanged while there continue to be reports that the former is testing China memory at least for phones sold there.
- Fiserv (-2%) - after yesterday’s rumors of banks looking at the company there was another executive departure
- Exxon (+1%) filing signaled earnings could be up $5B from previous quarter helped by upstream and refining profits
- HELE (+2%) - earnings beat and raised 2027 revenue guidance
- PENG (+7%) - earnings beat and raise highlighting AI demand
- EPAC (+6%) - earnings beat helped by IEEPA tax refunds also buying SFEG for just under $500ml
US:
- Mortgage Apps: -2.2% w.w prior 0%; 30yr Rate: 6.58% prior 6.57%
- 10:00 Wholesale Inventories
- 10:30 Oil Inventories
- 1:00 10yr Auction
- 2:00 FOMC Minutes
- 3:00 Consumer Credit
- Japan Bank Lending: 5.7% vs. 5.8% cons., prior 5.7%
By submitting this form you hereby expressly grant permission to use the information included thereunder to contact you for the purposes of sending periodic updates about ICE and/or its affiliates. Certain indices mentioned above are administered by ICE Data Indices, LLC.
Your contact information will not be used for any purpose other than that for which your consent has been given. To learn more about our privacy policy, please click here.
© 2025 Intercontinental Exchange, Inc. All rights reserved. Intercontinental Exchange and ICE are trademarks of Intercontinental Exchange, Inc. or its affiliates. For more information regarding registered trademarks, limitations, restrictions, and other important information, please visit intercontinentalexchange.com/terms-of-use.