US EQUITY OPEN: Stocks gain at the open on reduced geopolitical risk; tech outperforms
OPEN: Stocks open higher, boosted by positive reporting about the Middle East conflict while software gains follow a Palantir (PLTR) earnings beat and guidance raise. Oil prices faded the initial upside on recent reports pointing towards an upcoming announcement regarding arrangements for the full reopening of the Strait of Hormuz. As such, energy is the worst-performing sector, followed by Real Estate and Utilities. Meanwhile, tech is outperforming amid strength in semiconductors, memory, and software. US yields are tracking the move lower in crude prices, resulting in the curve steepening as the short end outperforms.
Given the pullback in the US 2yr yield, the dollar has seen pressure against some major currency pairs; AUD and NZD outperform. Meanwhile, JPY is seeing marginal weakness, despite positive commentary from US Treasury Secretary Bessent on the currency.
US data saw JOLTS fall more than expected in June to 7.359mln from 7.594mln (exp. 7.45mln); vacancy rate was unchanged at 4.5%, and quits rate stood at 2.0%. Meanwhile, Factory Orders unexpectedly declined 0.3% in June (exp. +0.2%). No reaction was seen on the data.
STOCK SPECIFICS
- Palantir (PLTR): Earnings beat & raised guidance
- Caterpillar (CAT): Earnings beat
- Amazon (AMZN): Founder Jeff Bezos plans to sell up to 15M AMZN shares
- On Semiconductor (ON): Earnings & revenue topped expectations
- Spotify (SPOT): Q3 MAU outlook missed.
- Snap (SNAP): Earnings & user metrics beat
- Intuit (INTU): Downgraded at Truist to 'Hold' from 'Buy'.
- Nike (NKE): Downgraded at JPMorgan to 'Underweight' from 'Neutral'.
Sessions framed around de-escalation in the Gulf have a well-worn template: crude gives back its risk premium first, energy lags the sector board, and the front end of the Treasury curve leads yields lower as the inflation impulse embedded in oil comes out, producing exactly the bull-steepening described here. The tell for whether the move has legs is the shipping and insurance side rather than the headlines: freight rates and war-risk premia through the Strait of Hormuz have historically normalised slowly and unevenly even after formal reopening arrangements, and past episodes of this kind have seen crude reprice lower on the announcement before physical flows actually resume, leaving the move vulnerable to slippage in implementation. The dollar's soft patch is mechanical, tracking the 2yr rather than reflecting any independent view, which is why the high-beta antipodeans outperform while the yen lags despite official commentary; verbal support for a currency from a Treasury Secretary has a mixed track record when not paired with a policy lever. On the equity side, the split between an earnings-driven software bid and downgrade-hit consumer names is standard rotation within a risk-on tape, and founder share-sale plans of the Amazon type have historically been absorbed without lasting effect when executed under pre-arranged programmes. The data prints, a softer JOLTS and a downside surprise on factory orders, fitting the no-reaction pattern typical when a geopolitical tape dominates, though the JOLTS trajectory feeds directly into the labour-market narrative ahead of the next payrolls. Worth noting is that the entire cross-asset move hangs on a single reported arrangement, and prior Gulf de-escalation tapes have reversed sharply when the follow-through communiqué disappointed.