Financial Daily: Tensions in the Middle East rise again, oil prices surge 2.6%! Why is the US stock market moving higher against the trend?

- Focus

– The US blockade of Iranian ports prompts Iran's military to state that if Iranian ports are threatened, any port in the Persian Gulf or Gulf of Oman will become unsafe.

– Reports suggest that the United States and Iran are still in contact and may hold talks again.

– OPEC has cut its forecast for global oil demand in the second quarter of this year by 500,000 barrels per day, citing the impact of Middle East conflicts.

Content compiled by the 'Harbor Family Office' under Henry Group. It does not constitute any investment or trading advice. Stay tuned.

- Stock Market

[US Market] US stocks have rebounded to pre-Middle East conflict levels, with the S&P 500 Index and Nasdaq rising over 1%.

The negotiations between the United States and Iran have reached a stalemate. However, reports indicate that both sides remain in contact and continue to express willingness to reach an agreement. The US stock market strengthened, with all three major indices closing higher. The S&P 500 Index and Nasdaq rose over 1%, returning to pre-Middle East conflict levels, while the VIX volatility index remained below 20.

At the close, the S&P 500 Index gained 1.02% to 6,886.24 points; the Nasdaq rose 1.23% to 23,183.736 points; and the Dow Jones Industrial Average increased 0.63% to 48,218.25 points. The VIX volatility index fell 0.52% to 19.13 points. Internet index ETFs and technology sector ETFs benefited from improved market sentiment, rising more than 2%.

The index of the seven major US tech giants closed up 0.91%, led by Microsoft which surged 3.64%. Google A shares rose 1.26%, Tesla gained nearly 1%, and Apple fell 0.49%. The Nasdaq Golden Dragon China Index rose 0.72% to 6,855.75 points. Among popular Chinese stocks, Kingsoft Cloud surged 6.4%, JinkoSolar gained 3.7%, and BYD rose 4.4%. In individual stocks, TSMC fell 0.24%, Oracle jumped 12.69%, and Circle rose nearly 12%.

[European Market] European major indices generally declined on Monday.

On Monday, European major indices experienced slight declines. At the close, the pan-European STOXX 600 Index fell 0.16% to 613.88 points. The pan-European STOXX 50 Index dropped 0.36% to 5,905.02 points, with Deutsche Telekom plunging over 6%, Danone shares falling 2.69%, and Inditex Group dropping about 2%.

The German DAX 30 Index fell 0.26% to 23,742.44 points; the French CAC 40 Index declined 0.29% to 8,235.98 points; and the UK FTSE 100 Index dropped 0.17% to 10,582.96 points.

[Asian Market] Asian stock markets declined across the board on Monday.

The U.S. military announced plans to blockade ships entering and exiting Iranian ports, causing oil prices to rise again and driving Asian stock markets lower across the board. By the close, the Nikkei 225 Index fell 0.74% to 56,502.77 points, and the TOPIX Index dropped 0.45% to 3,723.01 points. The KOSPI Index in South Korea closed down 0.86% at 5,808.62 points.

[Hong Kong Market] Hong Kong stocks opened lower and remained weak throughout the session, with all three major indices closing down.

Hong Kong stocks opened lower and continued to decline on Monday, with all three major indices closing in negative territory. By the close, the Hang Seng Index was down 0.90% at 25,660.85 points; the Hang Seng TECH Index dropped 0.79% to 4,822.01 points; and the Hang Seng China Enterprises Index fell 0.61% to 8,602.06 points. In terms of sectors, healthcare stocks were broadly lower, with JD Health plunging over 9% and Alibaba Health falling more than 5%. Gaming stocks also weakened, with Blue港 Interactive dropping over 7%, and Fire岩 Holdings and 博雅互动 both falling over 6%. Tencent Holdings closed down 2.87%. Conversely, new energy vehicle stocks rose against the trend, with Nio gaining 7.47%, BYD rising 4.95%, and Leapmotor up 1.64%.

[A-Share Market] All three major A-share indices closed higher.

A-shares opened lower but fluctuated upwards, with all three major indices closing higher. By the close, the Shanghai Composite Index gained 0.06% to 3,988.56 points, the Shenzhen Component Index rose 0.69% to 14,407.86 points, and the ChiNext Index climbed 0.80% to 3,476.44 points. The photovoltaic sector performed strongly, with Jing运通, Lian升 Technology, and Hua盛昌 among others hitting their daily price limits, and several stocks rising over 5%. Stocks related to the new energy industrial chain saw significant gains, with Tian华新能源 surging over 17%, Da中 Mining and 盛新 Lithium Energy hitting their daily limits, and CATL closing at an all-time high. Due to remarks by U.S. President Trump and the U.S. military about plans to blockade ships entering and exiting Iranian ports, the oil and gas sector strengthened as oil prices rose, with Blue焰 Holdings hitting its daily limit and Continental Oil & Gas rising over 6%. The gaming sector declined, with 冰川 Network closing down 11.87% and Kai英 Network hitting its daily loss limit.

– Bonds

[U.S. Bonds] U.S. Treasury yields opened higher but fluctuated downwards, with the 10-year Treasury note falling nearly 2 basis points.

U.S. Treasury yields opened higher but fluctuated downwards. In late New York trading, the yield on the U.S. 10-year Treasury note fell 1.98 basis points to 4.2972%, while the yield on the U.S. 2-year Treasury note dropped 1.89 basis points to 3.7763%.

[Non-U.S. Bond Markets] European government bond yields rose.

European government bond yields rose on Monday. In late European trading, the yield on Germany’s 10-year government bond increased 3.4 basis points to 3.092%, while the yield on Germany’s 2-year government bond rose 4.8 basis points. The yield on the UK’s 10-year government bond increased 3.2 basis points to 4.868%, while the yield on the UK’s 2-year government bond rose 5.3 basis points. The yield on France’s 10-year government bond increased 4.2 basis points to 3.749%.

[China Bond Market] Government bond futures closed higher across the board on Monday.

Government bond futures opened sharply higher on Monday and remained volatile near highs throughout the day. By the close, the 30-year main contract was up 0.38%, the 10-year main contract rose 0.09%, the 5-year main contract gained 0.07%, and the 2-year main contract advanced 0.03%.

– Foreign exchange

The US Dollar opened with a gap-up but then declined; the ICE US Dollar Index fell by 0.18%.

The US Dollar Index gapped up following the conclusion of US-Iran negotiations, but subsequently declined, erasing all gains. In late New York trading, the ICE US Dollar Index fell by 0.18% to 98.54 points, while the Bloomberg Dollar Index dropped by 0.19% to 1,196.24 points.

Non-US currencies: The US Dollar weakened against major global currencies, with the Japanese Yen slightly declining.

The US Dollar broadly weakened against major global currencies, with the Japanese Yen experiencing a slight decline. In late New York trading, the US Dollar rose by 0.06% against the Yen to 159.36 Yen. The Euro gained 0.29% against the US Dollar, and the British Pound rose 0.29% against the US Dollar. The US Dollar fell 0.62% against the Swiss Franc, while the Australian Dollar rose 0.44% against the US Dollar.

Offshore Chinese Yuan (CNH): The US Dollar versus CNH exchange rate was quoted at 6.8197 Yuan.

In late New York trading, the US Dollar versus offshore Chinese Yuan (CNH) exchange rate fell by 61 points compared to the previous session's close, settling at 6.8197 Yuan. Onshore Chinese Yuan (CNY) versus the US Dollar fell by 5 points compared to the previous session's closing price, ending at 6.8338 Yuan.

Cryptocurrency: Cryptocurrency markets strengthened, with Bitcoin rising approximately 2.6%.

Cryptocurrency markets strengthened as risk appetite improved. In late New York trading, Bitcoin rose approximately 2.6%, nearing 73,000 US Dollars, while Ethereum prices increased by about 1.8%.

– Product

Energy: US crude oil futures prices rose by 2.60%.

Oil prices jumped but later continued to retrace gains. In late New York trading, US crude oil futures rose by 2.60%, settling at $99.08 per barrel.

The precious metals market saw mixed performance, with spot gold prices opening lower but recovering losses.

Precious Metals:Spot gold opened with a gap down but recovered most of its losses. By the New York close, spot gold was down 0.21% at $4,739.75 per ounce after falling to $4,650 earlier in the session; US gold futures fell 0.48% to $4,764.60 per ounce.

Metals Futures Market:The metals market showed mixed results. Spot silver fell 0.34% to $75.62 per ounce, while US silver futures dropped 1.06% to $75.670 per ounce. US copper futures rose about 1.9% to $6.0570 per pound, spot platinum gained 1.27%, and spot palladium increased by approximately 3.4%.

[Disclaimer]

The content above is provided by Harbor Family Office (hereinafter referred to as "Harbor Family Office"), sourced from market information gathered from various channels. Neither Harbor Family Office nor its group members participated in preparing the content, nor did they explicitly or implicitly endorse or approve it. This article is for reference only and does not constitute any investment or trading advice. Investment involves risks. Readers should independently evaluate and judge this information and are advised to consult professionals before making any investment or trading decisions. Without authorization, no one may reproduce, copy, or publish the content in whole or in part to the public in any manner. Copyright belongs to Harbor Family Office and relevant providers.

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