Wall Street has a quiet Monday on paper. The US government bond market is shut for Columbus Day, there is no American economic data and stock futures have barely moved. Underneath that calm, oil has shrugged off President Trump’s “energy ceasefire” between Russia and Ukraine and climbed back above $105 a barrel, a hurricane is bearing down on the Gulf of Mexico and the week ahead is packed with bank earnings and inflation numbers.
In other words, the bond market has the day off, but the risks it worries about have not.
The Situation Right Now
S&P 500 futures are up about 0.1%, Dow futures are up a similar amount and Nasdaq 100 futures are a touch lower, according to CNBC data shortly before midday UK time. That follows a winning week for the major US indices, with the S&P 500 closing Friday up 0.59% at 7,811.54.
Europe is in better shape. The Stoxx 600 is up about 0.5%, Germany’s DAX roughly 0.7% and the FTSE 100 around 0.6%. The VIX, Wall Street’s main gauge of expected volatility, has crept up about 4% to near 15.5, which is still low but suggests traders are paying a little more for protection ahead of a busy week.
What Changed Since This Morning?
This morning’s brief was about a ceasefire nobody had signed. Oil had slipped in early Asian trade on Trump’s announcement, with Brent dipping towards $103. That dip has now gone. Ukraine says it supports the idea but wants Russia to do the same, President Zelenskyy says Moscow struck a power plant within hours of the announcement, and analysts have questioned where Russia would find the diesel Trump says it will supply.
At the same time, the Gulf has got noisier. Saudi Arabia says it is dealing with more drones and missiles after Houthi strikes on Riyadh airport killed 12 people on Saturday, Trump has said the US “may” join Saudi retaliation, and Iran is still reviewing Washington’s response to its proposal on reopening the Strait of Hormuz. The relief trade in energy lasted about as long as the overnight session.
The Biggest US Market Story
The real story for US shares is less about today and more about what is lined up behind it. This is the week the big banks start reporting. JPMorgan, Goldman Sachs, Wells Fargo and Citigroup are due on Tuesday, with Bank of America and Morgan Stanley on Wednesday. September consumer price inflation lands on Wednesday too, followed by producer prices and retail sales on Thursday, and Fed Chair Kevin Warsh speaks on Friday.
That matters because the market has climbed while borrowing costs have stayed close to their highest in more than 20 years. The 10-year Treasury yield finished Friday at about 5.24%. Banks will give the first proper read on how companies and households are coping with that, and CPI will decide whether the Fed feels any pressure to push rates higher still. A holiday Monday with no bond trading is a breather, not an answer.
There was a useful warning from the chip industry overnight as well. Speaking in Singapore, Broadcom chief executive Hock Tan said capital could become a bigger constraint on the AI boom than chips, memory or power, while Intel’s Lip-Bu Tan pointed to the rising cost of capital and investors wanting to see a return. Both still say demand for computing power outstrips supply. The point is that high yields are no longer just a bond market problem. They are starting to show up in how the biggest spenders talk about AI.
Stocks Moving Before The Bell
IREN, the data centre operator, is up around 5% to 6% in pre-market trading after The Information reported that Anthropic has an unannounced multiyear cloud deal with the company. CCC Intelligent Solutions, the car insurance software firm, has jumped about 9.5% on reports that private equity firm GTCR and activist investor Elliott are in advanced talks to buy it, according to Investing.com.
Micron is down about 2%, according to the same report, after Chinese rival ChangXin Memory Technologies reported progress on a next-generation memory design and a Taiwanese union pressed the company over employee bonuses. With bank results starting tomorrow, expect lenders to trade cautiously today.
FX and the Dollar
The dollar is a little firmer. The dollar index is up about 0.2% at around 102.4, which has pushed the euro down roughly 0.2% to about $1.118. The pound is steady near $1.323, and against the euro sterling is still close to its strongest level in around 16 months as France’s budget troubles weigh on the single currency. The yen has weakened slightly, with the dollar at about 158.6 yen.
Bonds
There is no cash Treasury trading today because of the holiday, although Treasury futures are open. Friday’s close left the 10-year yield at about 5.24%, the 30-year near 5.60% and the 2-year around 4.79%. The 10-year’s high last Wednesday, near 5.36%, remains the line many traders are watching. In the UK, the 10-year gilt yield is slightly lower at about 5.44%, with the Institute for Fiscal Studies warning that Chancellor Healey faces a gap of around £35bn ahead of the 28 October Budget.
Commodities
Brent crude is up about 0.8% at roughly $105.60 a barrel and US West Texas Intermediate is up a similar amount near $92.70, having been down around 1.5% earlier in the session. On top of the Gulf tension, Hurricane Isaias has strengthened to Category 3 as it approaches the US Gulf Coast, and UOB says producers have been forced to curtail offshore output. Natural gas futures are about 2% lower.
Gold is down about 0.3% near $4,203 an ounce, while copper is up more than 1%. Bitcoin is little changed at around $83,400.
Today’s Remaining Catalysts
US cash equities open at 14:30 UK time. Cleveland Fed President Beth Hammack speaks on the economic outlook at 17:50 UK time. Beyond that, the market will be watching for headlines on Hurricane Isaias, any reply from Iran on Hormuz, any US move against the Houthis, and whether the Russia-Ukraine energy ceasefire actually holds. The IMF publishes its World Economic Outlook on Tuesday.
Levels Traders Are Watching
For the S&P 500, Friday’s close at 7,811 is the first reference, with futures hovering around 7,860. For the 10-year Treasury yield, 5.36% on the upside and 5.20% on the downside are the markers when trading resumes on Tuesday. In oil, Brent’s ability to hold above $105 matters after it recovered from near $103 this morning. On the currency side, $1.118 in the euro and 102.4 on the dollar index are the near-term reference points, and gold around $4,200 is worth keeping an eye on. These are reference points, not targets.
Where That Leaves Us Into The Open
The fair reading of today is cautiously neutral. Shares are holding on to last week’s gains, Europe is firmer and nothing in the US calendar is likely to force a big move before Tuesday. The evidence against getting comfortable is oil, which has rejected the ceasefire story, a Gulf conflict that is spreading rather than calming, and a 10-year yield still sitting close to its highest since 2002 with CPI only two days away.
Opportunities this week are likely to come from company news rather than the index, as earnings and deals such as IREN and CCC show. The risks are a hot inflation reading, a fresh jump in oil from the Gulf or the hurricane, and weak guidance from the banks. The view would change if Brent fell back below $103, which would suggest the ceasefire is starting to count, or if yields pushed through last week’s high when trading resumes, which would likely take the shine off shares. The markets to watch are Brent, Treasury futures, the dollar, bank shares and the big AI names.
For beginners, a quiet day is not the same as a safe day. When a big market like US government bonds is closed, prices elsewhere can move on thinner trading, and the real test simply moves to the next session. This is an educational view of the market, not advice to buy or sell anything.
If you want to see how you would handle a week like this one, with earnings, inflation data and oil all competing for attention, the free Samuel & Co Trading trader assessment is a good place to test your approach.
