Closing Recap 

U.S. stocks finished sharply lower, extending yesterday’s modest losses as geopolitical concerns, weak retailer earnings, and a disappointing Treasury auction weighed on sentiment; gold rallied on safe-haven demand, oil slipped, Treasury yields jumped, and the VIX spiked. 

Key Takeaways 

• Sharp Sell-off: Major indices declined significantly (S&P -1.6%, Dow -1.9%, Nasdaq -1.4%), with selling pressure intensifying throughout the day. 
• Geopolitical Jitters: Concerns over a potential Israeli strike on Iranian nuclear facilities contributed to early market weakness and safe-haven flows. 
• Poor Treasury Auction: A weak 20-year Treasury bond auction in the afternoon triggered a spike in yields and appeared to exacerbate the stock market sell-off. 
• VIX Spikes: The CBOE Volatility Index (VIX) jumped over 12%, rising back above 20, signaling a significant increase in market fear. 
• Gold Rallies: Gold prices climbed again, benefiting from geopolitical uncertainty, a weaker dollar (early), and safe-haven demand, particularly after the weak auction. 
• Oil Slips: Crude oil prices ended lower after a volatile session, caught between geopolitical supply risks and economic demand concerns. 
• Yields Surge: Treasury yields rose sharply, especially at the long end, following the poor auction results. Bitcoin hit a new all-time high before paring gains. 

Market Overview 

U.S. equity markets experienced a sharp downturn today, extending the modest losses from the previous session as a confluence of negative factors rattled investor confidence. The day began with a cautious tone, influenced by a spike in UK inflation and, more significantly, reports raising concerns about a potential Israeli strike on Iranian nuclear facilities, which immediately sparked geopolitical anxieties. Weak earnings reports from several consumer-focused companies (TGT, TJX, VFC) further dampened sentiment, raising questions about the strength of the consumer. 

Index	Up/Down	% Change	Last
DJ Industrials	-817.23	-0.0191	41860
S&P 500	-95.9	-0.0161	5844
Nasdaq	-270.07	-0.0141	18872
Russell 2000	-59.02	-0.028	2046

Market breadth was decidedly negative from the outset, with decliners outpacing advancers by nearly 3:1 mid-morning, and small caps underperforming. While Communications, Technology, and Consumer Staples showed some relative resilience early on, most sectors struggled. The selling pressure intensified in the afternoon, particularly following a disappointing 20-year Treasury bond auction. The weak demand for government debt sent Treasury yields spiking higher, which in turn appeared to trigger a fresh wave of selling in equities. All eleven S&P sectors finished in the red, with Utilities, Health Care, and Real Estate leading the declines. The CBOE Volatility Index (VIX) surged over 12%, reflecting the significant increase in market fear. Even as Morgan Stanley reiterated a bullish long-term S&P 500 target, they cautioned that near-term catalysts for further gains might be delayed.

Economic Data

Yesterday’s key U.S. economic data point was the MBA Mortgage Applications, which showed a decline in activity as rates hovered near recent highs. 

• MBA Mortgage Applications (Weekly): Applications for home purchases fell -5% for the week (though +13% YoY). Refinance applications also fell -5% (+27% YoY). The average 30-year fixed-rate mortgage increased to 6.92%.

Commodities, Currencies, and Treasuries 

Gold prices continued their ascent, with June futures settling up $28.90 (+0.88%) at $3,313.50 per ounce. The gains were driven by increased geopolitical risk perception (Israel/Iran headlines), broader market uncertainty, and safe-haven demand, which intensified after the weak Treasury auction. Crude oil prices ended lower after a volatile session. WTI futures settled down $0.46 (-0.74%) at $61.57/bbl. Early geopolitical bid on potential Iran strike risks was offset later by a surprise build in weekly EIA crude inventories and broader economic concerns following the soft Treasury auction. Bitcoin surged to a new all-time high above $109,000 before paring gains significantly, ending the day volatile but still up. Treasury yields rose sharply across the curve, particularly at the long end, following the poorly received 20-year bond auction. The 10-year yield jumped over 11 basis points to end near 4.597%, while the 30-year yield also surged. The U.S. dollar saw mixed movement but gained against the Yen while the Euro also gained vs USD.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-0.46	USD/bbl	61.57
Brent	-0.47	USD/bbl	64.91
Gold	28.9	USD/oz	3313.5
EUR/USD	0.0051	USD	1.1333
USD/JPY	-0.87	JPY	143.64
10-Year Note	0.115	%	0.04597

Looking Ahead 

Investors will be watching for the S&P Global Flash PMI data for May later today for a fresh read on U.S. economic activity. Geopolitical developments, particularly concerning Israel and Iran, will remain a key focus. Any comments from Bank of Canada Governor Tiff Macklem at the G7 meetings regarding trade negotiations could also influence sentiment. With the VIX back above 20, increased volatility is likely to persist. Q1 earnings season is largely complete, so macroeconomic factors and geopolitical news will likely dominate market direction in the near term.