War is the theme this Monday, as most major asset classes slid slightly while oil prices continued to rise. For a while, the market was hopeful that oil flows would return to normal following the interim peace deal signed in June, as traffic in the Strait of Hormuz briefly recovered to nearly one-third of prewar levels. However, that may no longer be the case, as traffic through the strait has since fallen back to nearly nonexistent levels.
More concerning is the announcement of casualties on both sides. Iran stated that U.S. strikes had killed more than 50 people, while the United States announced the deaths of three service members. The U.S. president has vowed to make Iran pay for the deaths of the service members with more Iranian lives and told reporters that the most recent attacks were carried out “in honor” of the personnel who were killed.
The Dow slid 307 points to 51,839 by the market’s close. The Nasdaq remained nearly flat at 25,508, while the S&P 500 edged down 0.19% to 7,443. Energy stocks moved higher, and communication services and technology remained nearly flat, while all other sectors ended the day in the red.
Bonds and gold also posted losses. Both the 5-year and 10-year Treasury yields rose by 5 basis points, reaching 4.32% and 4.59%, respectively. Gold is once again testing the 4,000 mark.
Today, we received the latest U.S. leading economic indicators, which showed a slight contraction rather than remaining flat as expected. It is worth noting that these indicators have become much less effective at predicting recessions in recent years.
Adams Wealth Advisors will return tomorrow with more market updates.