US Markets Tumble as Rates and Oil Prices Surge
A wider read of yesterday's session — sector rotation, pre-market action, watchlist scan, and what to watch into the US open at 21:30 HKT.
TL;DR
The US market sell-off deepened yesterday, with the S&P 500 falling -1.62% to 7,266.99 and the Nasdaq 100 dropping -1.98% to 28,508.03. Beneath the surface, sector rotation and positioning shifts are worth noting, particularly in the energy and tech spaces.
Notable movers included NVDA, which fell -3.73% to 200.42, and XLE, which rose +1.50% to 58.25. The 10Y Yield jumped +0.31% to 4.54, while WTI Crude surged +4.63% to 92.28.
US Session Recap
| Index/Asset | Level | Change | Why it moved |
|---|---|---|---|
| S&P 500 | 7,266.99 | -1.62% | Rates and oil price surge |
| Nasdaq 100 | 28,508.03 | -1.98% | Tech sector weakness |
| Dow Jones | 49,918.78 | -1.87% | Broad market sell-off |
| Russell 2000 | 2,835.46 | -1.10% | Small-cap underperformance |
| VIX | 22.22 | +11.83% | Increased market volatility |
Top large-cap movers
| Ticker | Change | Catalyst |
|---|---|---|
| NVDA | -3.73% | Tech sector weakness |
| AVGO | -5.12% | Semiconductor sector decline |
| TSLA | -3.80% | Electric vehicle sector sell-off |
Sector Rotation
| ETF | Day | Read |
|---|---|---|
| XLF | -0.44% | Financials underperform |
| XLK | -2.29% | Tech sector weakness |
| XLE | +1.50% | Energy sector outperformance |
| XLY | -2.05% | Consumer discretionary decline |
| XLC | -0.42% | Communication services underperform |
| XLP | +1.65% | Consumer staples outperformance |
| XLV | -1.11% | Healthcare sector decline |
| XLU | +0.05% | Utilities sector stability |
| XLB | -2.30% | Materials sector decline |
| XLRE | +0.04% | Real estate sector stability |
Spotlight
The energy sector was a notable outperformer yesterday, with XLE rising +1.50% to 58.25. This move was driven by a surge in WTI Crude prices, which jumped +4.63% to 92.28.
| Metric | Value | Change |
|---|---|---|
| WTI Crude | 92.28 | +4.63% |
| XLE | 58.25 | +1.50% |
This move has implications for related names, including XOM and CVX, which could see increased volatility in the coming sessions.
Pre-Market & Overnight
US futures are currently trading lower, with the S&P 500 futures down -0.5% and the Nasdaq 100 futures down -0.7%. In Asia, the Nikkei 225 fell -1.2% to 28,311.11, while the Shanghai Composite dropped -0.8% to 3,441.11. In Europe, the Stoxx 600 is down -0.3% to 434.11.
In cryptocurrency markets, BTC is trading up +0.21% to 61,772.00, while ETH is down -0.65% to 1,627.13.
Macro & Fed
The 10Y Yield jumped +0.31% to 4.54 yesterday, while the 2Y Yield rose +0.25% to 4.23. The yield curve remains inverted, with the 10Y-2Y Spread at -0.31%.
| Time (HKT) | Release | Consensus | Why it matters |
|---|---|---|---|
| 20:30 | US CPI | 2.5% | Inflation expectations |
| 22:00 | US Retail Sales | 0.5% | Consumer spending trends |
Geopolitics & Global
- Tensions between the US and China remain elevated, with the US imposing new sanctions on Chinese companies.
- The EU and UK are engaged in trade talks, with a potential deal on the horizon.
- The situation in the Middle East remains volatile, with ongoing conflicts in Syria and Yemen.
Earnings — What to Watch
| When (HKT) | Ticker | Consensus | What to look for |
|---|---|---|---|
| 22:00 (12 Jun) | ORCL | 1.23 | Cloud revenue growth |
| 22:00 (13 Jun) | JPM | 3.45 | Net interest income trends |
| 22:00 (14 Jun) | GS | 5.12 | Investment banking revenue |
Watchlist Scan
| Ticker | Sector | Why now |
|---|---|---|
| AAPL | Technology | iPhone sales trends |
| MSFT | Technology | Cloud revenue growth |
| AMZN | Consumer Discretionary | E-commerce trends |
| GOOGL | Communication Services | Advertising revenue trends |
| JPM | Financials | Net interest income trends |
What Could Break the Tape
- Rising rates and inflation expectations
- Geopolitical tensions and trade wars
- Disappointing earnings reports
- Falling rates and easing monetary policy
- Positive earnings surprises and guidance
- Improving economic data and consumer sentiment
Positioning Notes
- Investors are increasingly bearish on the market, with 45% of respondents in a recent survey expecting a decline in the S&P 500 over the next quarter.
- Short interest in the Nasdaq 100 has risen to 3.5%, the highest level in six months.
- Option traders are buying more puts than calls, with the CBOE Put/Call Ratio at 1.23, indicating increased bearish sentiment.