The broader market mood continues to be driven by US-Iran developments and after the he said, she said episode yesterday, we’re seeing a rather quiet period today. The US continues to reaffirm that it is establishing some presence in the Strait of Hormuz, while Iran is maintaining that they are the ones still in control.
Looking past all the noise, shipping data does not lie. There’s still less than ten vessels crossing the strait in total per day, which reflects rather muted progress. Iran’s attack on the UAE is also sparking further tensions but so far, markets are still leaning towards being more optimistic about things playing out for the better.
S&P 500 futures are up 0.3% while Nasdaq futures are up 0.6% on the day. Tech shares may not feel the pinch from higher bond yields as much, but just be wary that it could be more of a factor for broader risk sentiment if this keeps up. 10-year Treasury yields are pushing to 4.42% on the week while 30-year Treasury yields is testing waters above the key 5% threshold.
That might come back to bite at investors as the bond market makes its move first.
For now, Wall Street will be hoping for more positive news to come. However, both the US and Iran continue to be far apart from reaching any consensus on talks. We’ll have to see how the US making inroads on the Strait of Hormuz will help with traffic
