U.S. Futures & World Markets

Stocks remain in a holding pattern as negotiations to end the Iran war continue to stall. President Trump will hold a meeting in the White House Situation Room today to discuss future attacks. Reportedly, Saudi Arabia, Qatar, and the UAE requested the US hold off on any attacks. Vice President JD Vance will hold a press conference at 1:00 PM ET.

As hopes for a peaceful resolution fade, oil prices and bond yields continue pushing higher. Investors seem increasingly numb to the White House rhetoric as the conflict lingers. The market is tired of words. It wants resolution.

Crude oil at $108 per barrel and the 10-year yield around 4.60% puts pressure on stocks. While the AI trade has been strong, it is a crowded trade — see the charts below. Let's see if stocks can continue to grind higher or if we're seeing signs of buyer exhaustion.

S&P Futures vs. Fair Value: -36.00  |  10-Year Yield: 4.60%

CORE Headlines

Charts & Data

SOX printing its biggest downside candle since the melt-up began. The Market Ear: "SOX is printing its biggest downside candle since the melt-up began. The index is now breaking below the steep trend line while slipping under the 8-day moving average. The 21-day sits lower as next meaningful support, while the 50-day remains far below current levels." The momentum trade is starting to crack at the edges.

Semis now 20% of all hedge fund net exposure. The Market Ear: "Semis are close to 20% of all hedge fund net exposure. Hedged, they say." When everyone owns the same trade, the unwind can be swift.

Leveraged ETFs hold ~$100B of long semi exposure — $2B of daily gamma. The Market Ear: "Leveraged ETFs are estimated to hold roughly $100 billion of long semiconductor exposure, translating into around $2 billion of daily short gamma. That means a 2% move in semis can mechanically trigger roughly $4 billion of buying into the close on up days — and equally aggressive selling on down days. The same flows that fueled the melt-up can also accelerate downside moves."

Goldman Risk Appetite at 99th percentile since 1991. Goldman Sachs via Daily Chartbook: "Goldman's RAI breached 1.1 last week, surpassing levels at the start of this year and reaching the highest read since 2021 — the 99th percentile since 1991. Looking at comparable episodes since the 1960s, we find subsequent returns showed more limited upside for the broad equity market with some correction risk, and larger, symmetric tails for Momentum."

Retail cash volumes on pace for most active month ever. Scott Rubner, Citadel via Daily Chartbook: "Citadel Securities gross retail cash volumes ranked in the 96th percentile in April versus all months since 2019, while May is currently on track to become the most active month ever — pacing roughly 12% above January 2021 levels. Options activity has been similarly impressive." When retail participation hits all-time highs, it's worth paying attention.

CTAs net buyers in every scenario over the next week. Robbie Stankard, Goldman Sachs via Daily Chartbook: "We have CTAs long $95 billion of global equities (64th percentile) and long $44 billion of US equities (79th percentile). We estimate that CTAs are small buyers of US equities in every scenario over the next week." Systematic flows remain a tailwind.

Equity positioning at highest since early February. Deutsche Bank via Daily Chartbook: "Our measure of aggregate equity positioning rose again, to its highest since early February (0.42sd, 69th percentile). Discretionary investor positioning jumped to overweight, taking it to its highest in 15 months. Systematic strategies continued to grind higher." Positioning is no longer light.

Large-cap tech positioning far more stretched than the broad market. Deutsche Bank via Daily Chartbook: "Positioning is far more stretched in large caps and most notably in Tech. The big tech trade is getting crowded." A crowded trade isn't a sell signal — but it raises the cost of being wrong.

S&P up 16% in 7 weeks — forward returns historically strong. HBM Strategies via Daily Chartbook: "The S&P 500 just rallied 16% in 7 weeks. That level of momentum is historically rare. Since 1960, forward returns after similar momentum bursts have generally remained strongly positive over the following 6–12 months. Strong trends tend to persist."

Goldman Momentum Factor up 25%+ in 3 months — history says pause, not top. Goldman Sachs via Daily Chartbook: "Goldman's Momentum Factor has surged more than 25% over the past 3 months. There have been only 11 episodes since 1980 of similar momentum rallies. History says it's time for a pause, not a top."

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This content does not constitute legal, tax, accounting, or other professional expert advice. Everything published is believed to be reliable, but its accuracy or completeness is not assured. Past performance does not indicate future results. The opinions expressed herein are subject to change without notice and are solely those of the author as of the date indicated.