Where we are: The Dow Jones futures are trading up 0.20% at 52114, building on Friday’s gains and holding near all-time highs. The cash index sits at 51565, also in positive territory. We’re seeing a steady tone as we head into the New York open, with the market digesting overnight moves and awaiting today’s US data. The VIX remains elevated at 18.44, indicating lingering caution despite the upward price action.
What’s driving it: The primary driver remains the narrative around potential Middle East de-escalation, which is weighing on crude prices and providing a tailwind for risk assets. This is filtering through to US equity futures, which are flat to positive. However, the underlying US yield picture is less supportive, with the 2Y yield up 15bps and the 10Y up 6bps on Friday, reflecting persistent hawkish Fed expectations. The Fed TWI is down slightly, but the rising real yield is a headwind for gold and potentially broader risk sentiment if it continues.
- The narrative of progress in Iran peace talks is pushing WTI crude down 4.48% on Friday, creating a more benign geopolitical backdrop for equities.
- US 2Y yields have climbed 15bps and 10Y yields 6bps, signaling ongoing concerns about inflation persistence and the Fed’s rate path.
- Speculative positioning in Dow Jones futures shows a modestly short stance among non-commercials (-2,019 contracts), suggesting some room for short-covering if sentiment holds.
NY session focus: Today’s session is dominated by the 08:30 ET release of US Durable Goods Orders and the Chicago Fed National Activity Index. We’ll be watching how the Dow Jones reacts to these prints, particularly any deviation from expectations that could influence Fed pricing. Key levels to watch are the intraday high around 52150 and the prior day’s low near 51500. The trade that’s working is a slight risk-on bias, but this is vulnerable to any hawkish surprises in the US data. The pain trade for this asset today would be a sharp reversal lower driven by unexpectedly strong inflation signals or a renewed spike in US yields.