Closing Recap 

U.S. stocks finished broadly higher after a volatile session, as markets absorbed initial concerns about U.S. strikes in Iran and a limited Iranian retaliation, shifting focus back to potential diplomatic resolutions; oil prices plunged sharply as immediate supply fears eased, gold edged higher, and Treasury yields fell. 

Key Takeaways 

• Stocks Rally After Early Geopolitical Jitters: Equities recovered from modest overnight dips to post solid gains, with the S&P 500 up nearly 1%, as markets appeared to downplay the immediate impact of U.S. strikes in Iran and a subsequent limited Iranian response. 
• Limited Iranian Retaliation Calms Nerves: After initial anxiety about Iran’s response to U.S. strikes, a “well-telegraphed” and seemingly limited retaliation appeared to ease worst-case scenario fears. 
• Oil Prices Plunge: Crude oil (WTI) cratered over 7% as the focus shifted from supply disruption fears back to potential diplomatic solutions and underlying demand/supply dynamics. 
• Gold Edges Higher: Gold prices managed a modest gain, likely still benefiting from underlying safe-haven interest despite the equity rally. 
• Economic Data Mixed: Flash PMIs for June were surprisingly strong, beating forecasts, while May Existing Home Sales were weaker than expected but showed rising inventory. 
• Yields Fall: Treasury yields declined, with the 10-year falling below 4.35%, despite strong PMI data, perhaps reflecting ongoing geopolitical caution or Fed expectations. 
• Sentiment Shifts, Job Market Concerns: Fear & Greed Index at “Neutral,” while various analysts highlighted concerns about job market weakness, particularly for recent graduates. 

Market Overview 

U.S. equity markets demonstrated notable resilience today, navigating initial geopolitical anxieties to finish with broad gains. The session began with futures slightly lower following the weekend news of U.S. airstrikes on Iranian nuclear facilities. While crude oil and gold initially saw safe-haven bids, and a sense of caution prevailed, markets seemed to progressively digest the situation. Reports of a “well-telegraphed” and seemingly limited Iranian military retaliation, designed to minimize casualties, appeared to significantly calm investor nerves as the U.S. trading day progressed. This shifted the focus away from immediate, widespread conflict fears and back towards potential diplomatic resolutions. 

Index	Up/Down	% Change	Last
DJ Industrials	374.96	0.0089	42582
S&P 500	57.35	0.0096	6025
Nasdaq	183.56	0.0094	19630
Russell 2000	18.98	0.009	2128

As a result, stocks, which had dipped early, embarked on a steady climb throughout the session. Market breadth improved significantly, favoring advancers by almost 2:1 by the close. Somewhat surprisingly, given the risk-on equity move, defensive sectors like Real Estate and Utilities were among the outperformers, alongside Consumer Discretionary. Energy was the clear laggard as oil prices plunged. Economic data released today was mixed; while June flash PMIs for both manufacturing and services came in stronger than expected, May Existing Home Sales were disappointing, showing the weakest pace for the month since 2009. Various market commentators also highlighted underlying concerns about the U.S. job market, despite recent headline figures. 

Economic Data

Yesterday’s U.S. economic data featured surprisingly strong flash PMI readings for June, contrasting with weaker existing home sales for May. 

• S&P Global Flash PMIs (June): Manufacturing PMI: 52.0 (Forecast: 51.0, Previous: 52.0). 
• Services PMI: 53.1 (Forecast: 52.9, Previous: 53.7). 
• Composite PMI: 52.8 (Forecast: 52.1, Previous: 53.0). 
• Existing Home Sales (May): 4.03 million unit annualized rate (Forecast: 3.95M, Prior: 4.00M). Weakest May pace since 2009. Inventory rose 6.2% to 1.54 million. 

Commodities, Currencies, and Treasuries

Gold prices managed a modest gain after early volatility, with August futures settling up $9.30 (+0.27%) at $3,395.00 per ounce. While the initial safe-haven spike from the Iran news faded, underlying geopolitical uncertainty and news of China seeking increased gold production likely provided support. Crude oil prices experienced a dramatic reversal and plunge. After WTI futures gained overnight, they sold off sharply throughout the U.S. session, settling down $5.33 (-7.22%) at $68.51/bbl. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-5.33	USD/bbl	68.51
Brent	-5.53	USD/bbl	71.48
Gold	9.3	USD/oz	3395
EUR/USD	0.0057	USD	1.16
USD/JPY	0.075	JPY	146.12
10-Year Note	-0.055	%	0.0432

The sell-off was attributed to the perception that Iran’s retaliation was limited and that the focus might shift back to diplomatic solutions, easing immediate fears of major supply disruptions through the Strait of Hormuz. Treasury yields fell across the curve, with the 10-year yield dropping over 5 basis points to around 4.32%. The move was likely driven by safe-haven demand earlier in the day and perhaps by the weaker housing data, despite strong PMI readings. The U.S. dollar was mixed, gaining against the Yen but weakening against the Euro. Macro

Looking Ahead 

Markets will continue to closely monitor developments in the Middle East for any signs of further escalation or de-escalation between Iran, Israel, and the U.S. Fed Chair Powell’s Congressional testimony later this week (Tuesday & Wednesday) will be a key event, providing insights into the Fed’s view on the economy, inflation, and potential policy responses to both domestic conditions and geopolitical risks. Earnings from FedEx, Micron, and Nike will also be important for gauging corporate health. Friday’s quadruple witching and index rebalancing could also add to volatility.