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Briefing.com Summary:
*Stocks are poised for a rebound after Friday's sell-off.
*Israel and Iran engaged in military strikes against each other, but both have announced a cessation of their strikes, triggering a relief trade.
*The SpaceX IPO on Friday highlights a big week of important happenings.
Friday's trading session did not follow form with the buy-the-dip playbook. Ultimately, it was a trend-down day that culminated in large losses for the major indices that were catalyzed by rising interest rates, new supply concerns (for stocks), and liquidation activity in the semiconductor/AI/mega-cap stocks following their massive outperformance. The S&P 500 saw its nine-week win streak come to an end.
There is an effort afoot this morning, however, to get a new win streak started.
Currently, the S&P 500 futures are up 59 points and are trading 0.9% above fair value, the Nasdaq 100 futures are up 454 points and are trading 1.6% above fair value, and the Dow Jones Industrial Average futures are up 123 points and are trading 0.3% above fair value.
This is a buy-the-dip trade, something NVIDIA (NVDA) CEO Jensen Huang has endorsed for the technology sector but which is permeating many corners of the market. The VanEck Semiconductor ETF (SMH) is up 3.5% after plummeting 9.2% on Friday.
Some of this is purely reflexive, with traders betting Friday's sell-off was nothing more than an overdue drawdown for an extremely overbought market. Some of it has to do with a relief trade wrapped up in the latest Middle East entanglement.
Israel and Iran engaged in military action over the weekend that drew President Trump's ire and triggered a nice pop in oil prices and Treasury yields. Both sides, though, have subsequently announced a cessation of their strikes, which has calmed down the oil market and the Treasury market.
WTI crude futures are up $1.06, or 1.2%, to $91.53/bbl after pushing $96.00/bbl in overnight action. The 10-yr note yield is down one basis point to 4.53% after hitting 4.58% overnight, even when foreign equity markets were feeling the hurt of Friday's sell-off on Wall Street. South Korea's KOSPI plunged 8.3%, while Japan's Nikkei declined 3.9%.
The U.S. market is in far better shape this morning and will be riding the coattails of the mega-cap stocks and semiconductor stocks to begin a week that is chock full of important happenings, namely the Apple (AAPL) Worldwide Developers Conference that begins today, the release of the May Consumer Price Index on Wednesday, Oracle's (ORCL) earnings report after the close on Wednesday, the release of the May Producer Price Index on Thursday, and the SpaceX (SPCX) IPO on Friday.
This is going to be a big week, the outcome of which is unknown. What is known at the moment is that the buy-the-dip trade is back in action.
