Wall Street under pressure again 📉IT stocks fall, oil & gas sector surge

US stock market sentiment remains fragile, as investors attempt to price in a wide range of possible outcomes related to the conflict in the Middle East, while receiving mixed diplomatic signals from Washington. S&P 500 futures are down 0.8%, after earlier swinging between gains and losses, underscoring persistent uncertainty. A lack of de-escalation between the US, Israel and Iran increases recession risks, while a swift agreement could trigger a relief rally. Technology stocks are under notable pressure, with pronounced selling visible across the software sector, weighing on broader equity sentiment.

• US Treasury yields moved higher, with the 2-year yield rising to 3.88% (+3 bps), suggesting limited demand for safe-haven assets despite geopolitical tensions.
• Oil prices climbed back above $90 per barrel, recovering part of earlier losses as markets continue to price in potential supply disruptions in the region.
• The US dollar strengthened by 0.2%, while gold remained relatively stable, pointing to a selective rather than broad-based flight to safety.
• Initial optimism around potential peace talks faded quickly, after Iran denied reports of substantive negotiations with the US, despite earlier comments from Donald Trump.
• Sentiment deteriorated further following reports that Persian Gulf allies may become involved, increasing the risk of broader regional escalation.
• The wide range of possible scenarios is driving elevated volatility across global markets.
• European equities edged up 0.1%, with Puig Brands standing out, surging as much as 17% following reports of takeover talks with Estée Lauder.
• Gold erased earlier gains after Turkey signaled it may use its gold reserves to support its currency.
• Investors remain concerned about lasting economic effects, even if the conflict de-escalates quickly. According to UBS, volatility is likely to remain elevated because:
  • oil inventories will need to be rebuilt,
  • supply chains may remain disrupted,
  • economies will continue to feel second-round effects of the supply shock.
• UBS maintains a defensive positioning in Europe, reducing exposure to cyclical sectors, including banks.

The military conflict in the Middle-East escalates

The military situation remains tense and escalatory: Iran launched overnight attacks on Israeli targets and US bases, Saudi Arabia intercepted drones, Kuwait reported damage to energy infrastructure, sirens were also triggered in Bahrain.

• QatarEnergy declared force majeure on LNG deliveries to Italy, Belgium, South Korea and China, adding to concerns over global energy supply.
• Energy infrastructure in Iran has also been hit, including facilities in Isfahan and a pipeline supplying the Khorramshahr power plant.
• Markets remain on “hyper alert”, with investors awaiting confirmation of formal US–Iran talks that could provide clearer direction.

Charts (xStation5)

US500 (D1): elevated volatility with downside pressure dominating recent sessions.

Source: xStation5

Sector view: oil continues its upward trend, while Microsoft and other IT names extend declines.

Source: xStation5

Corporate news

• US equity futures trimmed earlier losses after the cash open, though volatility remains elevated; S&P 500 contracts were broadly flat.
• Jefferies Financial Group (JEF) gained 9.5% in premarket trading, after the Financial Times reported that Sumitomo Mitsui Financial Group is considering a potential takeover, with investors pricing in a possible acquisition premium.
• JFrog (FROG) rose 2% before the open, following an upgrade from UBS (neutral → buy), with analysts highlighting resilient fundamentals despite recent share price weakness.
• Ralph Lauren (RL) added 1.7% in premarket trading, after Citi upgraded the stock to buy, citing successful brand elevation and improving operational performance.
• Trian Fund Management and General Catalyst Group amended the terms of their definitive agreement to acquire Janus Henderson.
• Ares Strategic Income Fund reported share repurchase requests totaling 11.6% of shares outstanding, significantly above its 5% framework limit.
• Apollo Global Management is limiting redemptions from one of its largest non-traded private credit funds for retail investors amid elevated withdrawal requests.
• Netgear (NTGR) surged 16% in premarket trading, after the FCC moved to ban imports of new foreign-made consumer routers, potentially improving the competitive landscape for domestic producers.

Source: xStation5