Most major asset classes started this week in the red, with, unfortunately, largely the wrong ones in the green. As no deal has been reached between the U.S. and Iran, while Iranian officials continue to demand full compliance with their demands regarding the U.S. naval blockade and financial terms, the market has once again found itself potentially underestimating the risks surrounding geopolitical developments. Brent crude oil is once again approaching the $90-per-barrel mark.
Stocks have largely looked past the conflict, as the damage to earnings has been limited so far, thanks to the current index concentration in AI and AI-adjacent stocks. The Dow Jones Industrial Average declined just 61 points to 53,976. The Nasdaq saw a minor loss of 0.32% to 26,605. The S&P 500 barely budged, closing at 7,753. The energy sector advanced by nearly 5% as oil futures rose dramatically, while sectors of similar size, namely utilities and real estate, booked losses of slightly more than 1%.
Interest rates, on the other hand, have reacted significantly, as the prospect of potentially prolonged inflation has boosted demand for greater compensation. The U.S. 5-year Treasury yield rose 5 basis points to 4.41%, while the 10-year yield edged up 4 basis points to 4.7%. Gold once again rallied and remained solidly above the 4,400 mark.
We now turn our attention to the SEC’s newest ruling. The SEC has ruled that a major subset of data-center securitizations does not need to comply with the disclosures and investor protections required for similar deals, making it easier for data centers to take on additional debt financing.
Thank you for sticking around and listening. Adams Wealth Advisors will be back with further updates.