| Following a brutal overnight session in futures (S&P futures down -1.5% and Nasdaq futures off as much as -2%), along with steep losses across Asia and Europe driven by renewed inflation concerns after a second sharp spike in oil prices, investors once again remained composed and stepped in to buy the dip. Markets stabilized by late morning, trimming much of their earlier declines. Today’s trading closely mirrored yesterday’s pattern: a broad lower open, fresh session lows shortly after the bell, and then a steady rebound late in the morning as buyers capitalized on weakness. Wall Street largely brushed aside mounting concerns over a potentially extended Middle East conflict, soaring oil prices fueling inflation fears, diminished expectations for Federal Reserve rate cuts amid higher energy costs, and strength in both the U.S. dollar and Treasury yields. Earlier in the session, NYSE breadth was overwhelmingly negative, with decliners outpacing advancers by more than 9-to-1, and all eleven S&P sectors down at least 1%. Materials, industrials, and technology led the declines. Yet, dip buying persisted once again, with major indices defending critical technical levels. For example, today’s S&P 500 low of 6710.42 was just 10 points below the 12/17/25 low of 6720.43 — and the index has since rebounded more than 100 points from that area. Stocks ultimately finished broadly lower as investors look ahead to key labor market data later this week. Meanwhile, as oil, gasoline, and natural gas prices continue climbing, inflation worries have intensified, prompting a sharp pullback in expectations for Fed rate cuts. Markets are swiftly adjusting, with higher energy costs driving inflation forecasts upward and reducing the likelihood of near-term monetary easing. Higher oil prices are once again weighing on transportation stocks, with airlines, online travel platforms, and cruise operators trading lower. In contrast, energy producers and defense contractors are outperforming amid the escalating Iran-related headlines. |