Investors will watch for the volatile rotation into the technology sector follow through today. On Monday, ARM Holdings (ARM) gained 17.16%, Astera Labs (ALAB) gained 12.36%, and Akamai Technologies (AKAM) added 12.33%.
Oil stocks slumped. WTI crude fell sharply after the U.S. President said that Iran wanted to negotiate a peace deal. Despite numerous attempts to achieve peace, they failed. Crude prices fell anyway.
Brent Crude prices fell by 3.4% to trade at around $100/bbl. Nymex crude for October fell by 4.5% to around $96/bbl. The drop is the largest daily decline since August 4.
Marathon Petroluem (MPC) dropped by 5.3% as did Valero Energy (VLO).
The crude price drop ignored the rising diesel prices in the U.S. retail markets. Diesel prices topped $6.51/gal on Monday, as AAA reported. This is the highest record price. It is sharply higher than last year’s average price of around $3.70/gal. Diesel prices in California were over $8.40/gal. Washington and Hawaii faced diesel prices in the low $7/gal range.
Watch Bond Yields
While the technology sector trades near an all-time high, an abrupt sell-off is possible. Continue to watch the 10Y Treasury bond yield, which is at 4.95%. It needs to back down from the 5.0% resistance level. Otherwise, a persistently high yield would encourage markets to sell stocks to buy bonds for lower risk exposure.
