- Brent crude eased 1.7% after a senior Iranian official told Reuters Tehran would reopen the Strait of Hormuz within seven days if the US eases pressure, and Saudi Arabia restarted operations at its East-West Pipeline, according to three sources. Brent remained within reach of $100 a barrel.
- The S&P 500 and Dow were set for a modestly higher open, with Dow E-minis up 208 points (0.4%) and S&P 500 E-minis up 6 points (0.08%), while Nasdaq 100 E-minis slipped 8 points (0.03%). Falling crude and easing Treasury yields pulled the S&P 500 near its record high and the Nasdaq Composite to a new record.
- Meta closed 11.3% higher on Monday, driving the Nasdaq to a record, as analysts pointed to its Muse AI agent topping ChatGPT downloads in its first 13 days. Meta eased 0.5% premarket, while chip stocks Nvidia, TSMC and SK Hynix lost ground.
- The 10-year Treasury yield sat at 4.9% and traders priced a 53.1% chance the Fed hikes at least 25 basis points in October after this month's hike, with Fed policymakers citing AI demand and the oil shock as key inflation drivers. Bitcoin retreated 1% from a seven-month high, dragging Strategy and Coinbase lower.
Quotes
“Markets are really seeing oil as the key macro variable here, where both interest rates and the broader market are very much correlated to what's happening in oil and on the geopolitical front”
“The market got credible confirmation that its monetization is on track with its AI agent, which has boosted confidence that Meta could finally be turning its huge AI spending into products that consumers will use”