Stocks remain buoyant following the Iran agreement, but the bond market is sending a more cautious message. Treasury prices barely moved despite expectations that lower geopolitical risk would spark a stronger rally. Bond investors appear focused on the reality that the agreement is only a framework for future negotiations, with major issues still unresolved and potential setbacks ahead.
Inflation concerns also remain in focus. Beyond oil prices, investors continue to weigh the impact of government spending, monetary policy, AI infrastructure investment, and deglobalization trends. These factors are likely to influence discussions as the Federal Reserve begins its latest meeting under Chair Kevin Warsh, with a policy decision due tomorrow.
Speculation remains intense around SpaceX, whose crypto-based perpetual futures experienced a sharp short squeeze overnight. At peak levels, SpaceX’s implied valuation briefly surpassed major technology giants despite significantly smaller revenue and ongoing losses. The stock continues to benefit from upcoming index inclusions that could drive substantial passive-fund demand.
Meanwhile, falling oil prices are adding to market optimism after President Trump reiterated that the Strait of Hormuz is expected to reopen this week. However, some investors are beginning to take profits, creating a potential “sell-the-news” dynamic if buying momentum fades.
Key stocks in focus include $SPCX, $AMZN, $MSFT, $QQQ, and $SPY.
Internationally, the Bank of Japan raised interest rates by 25 basis points to 1.0%, while U.S. housing starts missed expectations, highlighting pockets of economic softness beneath the market’s optimism.
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