It would be tempting to say that the Warsaw Stock Exchange entered a favourable "time window", during which the broader market played the game of de‑escalating tensions in the Middle East. This time the reason for the brief relaxation was media reports indicating a purported U.S. proposal for a temporary suspension of sanctions on Iranian oil.
Ultimately this information was not confirmed by facts, yet it allowed the European indices to "pull up" in the last phase of the session. Investors across the ocean could not have been fooled by this.
American indices did start the day on the upside, but quickly fell into a downward trend. In the end the S&P 500 lost 0.07%, and the tech‑heavy Nasdaq fell 0.45%.
The majority of companies in the S&P 500 finished Monday’s session on the upside
Interestingly, most companies in the S&P 500 finished Monday’s session with gains, confirming the ongoing rotation of capital by investors taking profits on tech stocks. This is also helped by high yields in the debt market — on Monday the yield on U.S. 10‑year bonds rose even higher, exceeding 4.6%.
Reports from the Middle East have been very ambiguous lately. On one hand, both sides of the conflict confirm a willingness to negotiate; on the other hand, they do not show a readiness to make concessions. In one of yesterday’s statements, President Trump said he was not open to concessions to Tehran.
The U.S. president also "heated the temperature", announcing at the end of the day that, at the request of leaders of several regional states, he cancelled the planned Tuesday attack on Iran. At the time of writing this comment on Asian markets, we observe mixed sentiments. We can find indices that are doing quite well — Hang Seng gains about 0.2%, and India’s Sensex about 0.5%.
There are also indices that are being discounted — among them is the Korean KOSPI, which is losing more than 3%. Futures on European indices suggest a neutral opening.
Much indicates that European indices will have to give back the "bonus" they gained in the last phase of yesterday’s trading (this also applies to the Polish market). We do not expect major changes on Wall Street — investors are slowly preparing for the Nvidia report, so the most interesting part of the week is still ahead.
