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Markets corrected for Friday’s “panic selling” today, with all major indexes up in the green. The Dow partially filled its -760-point hole from Friday the 13th, up +317 points today, +0.75%. The S&P 500 mostly made back its -68 points from the previous session, +56 points today, +0.94% — and back above the psychologically pleasing 6K.

The Nasdaq more than made up for Friday’s selloff, +294 points today, +1.52%. And the small-cap Russell 2000 grew +1.12%, +23 points. Bond yields started to come back up but are currently at benign levels: +4.45% on the 10 year, +3.97% on the 2-year. The 30-year yield remains below +5%: +4.96%.

Middle East Tensions Continue
 

While Israel and Iran trade drone strikes, investors have decided to not let this bother them too much. Oil prices, which initially spiked upon the opening salvos of Israel bombing Iran’s nuclear facilities late last week, have faded -2.4% from Friday’s jump to nearly $73 per barrel. (“Liberation Day” took a lot of wind out of oil prices’ sails. Going back to mid-January this year, we were seeing oil prices as high as $80 per barrel.)

With the G7 summit ongoing in Banff, Alberta, Canada today, reports are that wide disagreements among countries is keeping the world’s economic leaders from issuing a joint statement about the Israel/Iran war. President Trump, for his part, said he would not be part of any statement that urges a de-escalation of tensions in the Middle East.

Basically, investors see this issue being contained at present. Israel itself reportedly has claimed air superiority over Iran’s capital of Tehran. This tracks with overall buoyant trading going back to after tariff issues threatened to increase inflation; as soon as a pause in reciprocal tariffs was issued, investors got busy buying stocks at discounted prices.

We’ll see if the market can push much higher than current levels. We already know there will be no interest rate cut from the Fed this Wednesday, but if trade deals finally start to ring in (ahead of the July 9th expiration of the 90-day pause) then that could be a catalyst for more near-term growth. With two weeks left in calendar Q2, all major indexes are up since the first of April.

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