Indexes

A weekend of fresh US-Iran strikes turned a market sitting on record highs into a defensive one. Iran's Revolutionary Guard hit American bases across five Gulf states after US forces struck Iranian targets on Sunday, the fourth US strike in a week, and Tehran declared the Strait of Hormuz closed "until further notice," a claim US Central Command rejected as it moved to keep the waterway open. Roughly a fifth of the world's seaborne oil passes through the channel, and crude jumped as much as 4% overnight before settling for a gain of about 2.5%, with WTI at $73.80 and Brent at $78.50. The reaction had the shape of an inflation shock: Treasuries sold off and yields backed up, gold slipped, and the dollar softened, while equity futures pointed lower behind the chip-heavy Nasdaq. S&P 500 futures sit down about half a percent, and the Dow is holding better as energy shares climb with oil.

The overnight damage concentrated in Korea, where the memory trade that led the market higher last week reversed hard.

In Europe, the Stoxx 600 slipped about 0.3%, with energy the one green sector as Shell, BP and TotalEnergies rose 2% to 3%, while travel and construction shares led the decliners, per Reuters. London, Frankfurt and Paris each traded within a fraction of Friday's closes.

In the News

Rates, FX, Commodities

Yields did the opposite of what a war scare usually produces. There was no rush into Treasuries; instead the curve backed up as traders read the oil jump as fuel for inflation and one more reason a hawkish Fed might hold off on cuts, lifting the 10-year to its highest in seven weeks. Gold, the reflex haven, fell as those higher-rate expectations dulled its appeal, and the dollar eased on reports that US-Iran talks were still under way.

Technicals

The charts enter the week stretched and staring at a lower open. The S&P 500 ended Friday at a record 7,575.39, and futures now imply an open near 7,540 that would still hold above the 20-day average near 7,470, the first line buyers need to defend. The Nasdaq 100 is the sore spot, with futures implying a slide toward 29,450 and the 20-day near 29,300 as first support. Bonds are the other story: the 10-year at 4.57% has cleared the 4.53% area that capped it last week and now looks at the spring high near 4.60%, a close above which would open room toward levels last seen in May. Micron is the name to watch on the charts, having lost the $1,000 level it reclaimed only last week; it is indicated more than 5% lower before the bell, unwinding Friday's chip enthusiasm in a single gap. The hourly chart below traces the move.

MU, Micron (hourly): the gap below the $1,000 level it had reclaimed last week, as the group reversed.

Breakouts & Breakdowns

Breakouts

Exxon Mobil (XOM) — reclaimed its 50-day average near $138 as crude jumped, the energy complex the session's one clear bid; the July high is the next marker overhead.

ConocoPhillips (COP) — pushed back above its recent range near $109 as higher oil lifted the leveraged producers; a hold keeps the June highs in view.

Breakdowns

SK Hynix (SKHY) — gave back most of Friday's debut pop, indicated near $152, sliding back toward the $149 offer price that now marks first support.

Micron (MU) — lost the 20-day it reclaimed last week and is indicated more than 5% lower, with the early-July low the next support to defend.

SKHY, SK Hynix (daily): the US shares round-trip toward the $149 offer price after Friday's debut pop.

XOM, Exxon Mobil (daily): the shares climb as crude jumps on the Gulf escalation.

Top Movers

Gainers

Energy was the market's only green corner. Exxon Mobil (XOM), Chevron (CVX) and ConocoPhillips (COP) all climbed with crude, and in Europe Shell rose 1.8%, BP 2.7% and TotalEnergies 2.3% as the standoff put fresh risk into oil, per Reuters. The higher-leverage producers stand to see the biggest earnings revisions if crude holds in the mid-70s, which is why the bid ran well beyond the integrated names.

Defense contractors also caught the geopolitical wind, with Lockheed Martin, RTX and Northrop Grumman all firmer before the bell.

Losers

SK Hynix (SKHY) gave back most of its debut gains, indicated down about 9% near $152 after the American shares closed at $168 on Friday, while its Seoul line fell a record 15% and helped drag the Kospi into a circuit breaker. The reversal looked less like the AI-memory story cracking than a positioning unwind: Friday's ADR listing traded at a rich premium to the Korean stock, and the two are snapping back toward each other. How the shares settle this week will tell whether last week's demand was conviction or a scramble for scarce paper.

Micron (MU) fell about 5% in sympathy, and the storage names dropped harder, with Western Digital and SanDisk each off 6% to 7% and Seagate down 5% as the whole group followed Korea lower. AMD (AMD) and Intel (INTC) slipped about 3%, and even Nvidia (NVDA) edged down, a reminder of how much this market still leans on one corner of tech.

Macro Calendar

Monday brings no US economic releases of note, which hands the session to geopolitics and positioning before Tuesday's inflation reading takes over. One trade-off frames the week: a soft June core would give the Fed's patient camp cover, while a firm one, made likelier in the market's mind by the oil jump, would keep alive the rate-hike talk that traders now price near even odds.

Earnings Today

The reporting week opens quietly before Tuesday's flood of bank results. Fastenal (FAST) is the only name of note before the bell, and as a distributor of industrial and construction supplies it offers an early read on factory and building demand. The after-hours slate is empty.

Drivers

1. The Strait of Hormuz is the one thing the session cannot price. Traffic through the channel had not visibly stopped by Monday morning even as Iran called it closed, and crude settled for a gain well below its overnight spike, which says the market is treating a full blockade as a low-probability outcome. Watch the crude tape for the break that would change that read: a sustained push through $75 on WTI would say the premium is genuinely building. Below Friday's $72, the standoff reads as noise again.

2. For all the geopolitical static, Tuesday's core inflation reading is what actually moves the Fed. Headline prices are seen easing toward 3.8%, but the core figure, expected at 0.3% on the month, is what would validate the roughly even odds traders now assign to a rate hike by year-end. The oil move complicates the read, feeding the headline directly and, if it sticks, making the patient case harder to argue. Chair Kevin Warsh testifies the same morning, his first appearance before Congress in the role.

3. Memory names open on the defensive after Korea's rout, and whether the group steadies or bleeds sets the tone for a chip-heavy Nasdaq. SK Hynix's US shares are the single stock to watch, indicated back near their $149 offer price after a two-session round trip from euphoria to circuit breaker. Micron, Western Digital and the storage names carry the same thread into their own reports later this month. The $149 offer price is the line the AI-memory trade now has to hold.

SPY (daily): the broad-market tracker comes off a record Friday into a lower open.

QQQ (daily): large-cap tech leads the pullback as the chip selloff spreads.