The events in the Middle East this weekend are clearly the focal point today. A pretty typical conflict playbook was activated to start the day: Equites lower, Oil higher, Dollar stronger. The S&P 500 opened down 0.8% before trading to as low as -1.2%. The Dow and Russell 2000 were also down over 1% at their lows. However, buyers stepped in once again to defend the S&P’s 100d moving average, eventually taking it into positive territory and back near the 50-day, an area of overhead resistance. This came despite Secretary of Defense Hegseth and President Trump not ruling out boots on the ground in Iran if necessary, though Hegseth did say the US wouldn’t be pulled into an endless war

The Russell is currently leading. Retail/thematic plays are some of the strongest areas, with a Bombs Fly Retail Buys reaction. The Roundhill Meme ETF is up 4% today. While space names are tied to defense strength, even non-contractor majors are trading up ~5%. Quantum computer stocks are mixed. Rare earth names are also mostly higher. Last but not least is the rally in crypto- Bitcoin and Ether are up ~5%. Bitcoin is looking to reclaim $70k while Ether has gotten back above $2k.

Only three sectors are decidedly higher- not too surprising. Energy (oil ripping) and Industrials (defense contractors) are leading as expected, though Industrials are seeing broad strength beyond defense. Tech is also strong as software recoups more of its recent losses (IGV +2%) and Nvidia bounces 3%.

One area that hasn’t seen buyers emerge is Treasuries, along with global yields overall. Yields are spiking across the curve by >10bp, though off their highest levels. After finally breaking below 4.0% last week the 10-year is back over it. Inflation concerns on energy price spikes as well as ISM Manufacturing data are countering any haven flight. Meanwhile the US Dollar Index blew through all 3 major moving averages as it gained on all the major crosses, including ~1% against the Euro, Yen and Swiss Franc.