US market rally is a 'game of expectations' fueled by sentiment
US stocks are trading higher with all three major averages (^DJI, ^GSPC, ^IXIC) in the green during Tuesday's session despite ongoing uncertainties including the ongoing conflict in the Middle East, tariff risks, the Federal Reserve's next move, and more.
Opening Bid host Brian Sozzi chats with Yahoo Finance anchor Julie Hyman, Ritholtz Wealth Management chief market strategist Callie Cox, and FS Investments chief market strategist Troy Gayeski to discuss what's driving the market's climb.
To watch more expert insights and analysis on the latest market action, check out more Opening Bid here.
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Oil price volatility flattens as Middle East tensions settle
Oil volatility (^OVX) has leveled out as geopolitical concerns in the Middle East fade. Yahoo Finance anchor Julie Hyman takes a closer look at the recent oil price (CL=F, BZ=F) action and the moves in the broader energy sector (XLE). To watch more expert insights and analysis on the latest market action, check out more Market Domination here. Crude prices have seen big swings in recent weeks amid geopolitical uncertainty. We're taking a closer look at the action in our chart of the day. Yahoo Finance's Julie Hyman joining us now with more. Julie. Well, energy volatility is what I am watching here. You know that there is a volatility measure for the S&P 500. You might not know that there is one for oil prices as well. It's called the OVX as opposed to the VIX for stocks. And the OVX, as you might imagine, given all the volatility we've seen in oil recently, really spiked to highs that we have not seen since early 2022 as we saw Israel hit Iran, Iran hit Israel, and then the US of course hit Iranian nuclear assets. So, all of that causing that huge spike in oil volatility on concerns that we would see flows disrupted. But it is just as quickly calmed down. That spike was very short-lived as we saw it spike and then really recede here. Couple of things that oil traders are now watching. There is an OPEC Plus meeting that is coming up in a couple of weeks, a little less than two weeks. And there are some reports now that OPEC Plus may extend its production cuts. So that putting some downward pressure on oil prices. Also, Bloomberg is reporting that Treasury Secretary Scott Beson said that sanctions on Iran are remaining in place. So that's something else that oil traders are factoring in. But really we saw oil really lose about $10 per barrel of value if you're talking about WTI while all this was going down and we were seeing it come back down. WTI is off about 9%, almost 8, 9% so far this year, whereas the ETF that tracks those energy stocks, the XLE, is really little changed. And I looked at it earlier today, it's almost evenly split between gains and losses in terms of the stocks that are up and the stocks that are down on the year. The best performer in that ETF EQT, which is more of a natural gas company as opposed to oil. Halliburton, the oil services giant, is the worst performer within that ETF, Josh. All right, thank you, Julie. Sign in to access your portfolio
Yahoo
a day ago
- Yahoo
S&P 500, Nasdaq close at fresh all-time highs
Both the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) closed at new record highs on Friday. The Dow Jones Industrial Average (^DJI) added 432 points. Stocks briefly shed gains after President Trump posted that the US was "terminating ALL discussions on Trade with Canada," but ultimately, the averages rallied into the close. Yahoo Finance Reporters Julie Hyman and Allie Canal recap the action at the close. To watch more expert insights and analysis on the latest market action, check out more Market Domination Overtime here. That is the closing bell on Wall Street. And now, it's market domination overtime. We're giving you full team coverage of all the moves to get you up to speed on the action from today's trade. Yahoo Finance's Julie Hyman, as well as Mark Malick, Siebert Financial CIO, and Yahoo Finance's Ali Canal join us here to break down the moves today. Let's get it down to Julie Hyman at the New York Stock Exchange for more about where we closed. Julie. Well, it was looking a little iffy there for a while, but the S&P 500 has indeed closed at a new record high, Josh, surpassing the 6144 that was the previous closing high. So 6155 is round where we're closing here. Indeed, a record and recovering after that dip that we saw in the afternoon that seemed to be a double whammy of President Trump saying that there was not a trade deal happening with Canada and that tariffs would remain in place on that, a trading, close, one-time close trading partner, and also some sort of technical effects of a Russell reconstitution here. So a couple of things to watch there. The Nasdaq, we should mention, also closing at a record high here. The Dow still pretty far from that level, which was above 45,000, but all three major averages making it there. As we've been talking a lot about, it is partially momentum here, and a lot of investors and traders, especially as we get to the end of the quarter, perhaps seeing a little performance chasing here, not wanting to end the quarter in the red if they were not positioned to take advantage of the rally that has been happening. From a fundamental basis, yes, tariffs are still hanging over our heads, but investors seem to be looking to the Fed to perhaps rescue prospects before the end of the year, pricing in a couple of rate cuts. Oh, and by the way, yes, we are heading into earnings season. And even though earnings are projected to have the smallest year-over-year increase in two years, still, a lot of folks we're talking to are saying they still see those prospects as fairly solid on the earnings front. And I think Ali's there's got a deeper look at what's going on in the market. Hey, Julie. And yeah, if we take a look at the sector action for today, you see consumer discretionary communication services and industrials leading us higher. And then we have energy, healthcare, and interesting to see tech as one of the laggards there, especially considering we got that record for the Nasdaq composite and a few other records this week. But here you're looking at a five day and we are up over 4% there. Now Monday does mark the end of June, so let's take a look at month to date here. You will see tech at the leaderboard, the top of the leaderboard, I should say, followed by communication services. Then you have real estate, materials also, healthcare as some of your laggards here. But Monday just doesn't mark the end of June, it also caps off the first six months of the year. So to that point, let's take a look at a year to date. So year-to-date sector action, we have industrials leading the way higher there. Healthcare is your biggest laggard along with consumer discretionary and energy. But this is an interesting chart to look at. If we take a look at year to date for consumer discretionary, this is probably one of the most exposed sectors when it comes to President Trump's tariffs. You see that dip in April after the Liberation Day tariff announcements, and then we bounced off of those lows there. And then same with energy that's also been an interesting story. When Trump announced those Liberation Day reciprocal tariffs, there were a lot of concerns that we could be entering a recession. So there was demand concerns here for energy that led to the stark drop. And then we saw supply concerns after that Middle East escalation between Israel, Iran. That de-escalation, though, brought oil prices down. And now year to date, we are off about four tenths of a percent here. So I think this paints a good picture when it comes to a lot of those macro headwinds facing stocks, whether it be tensions in the in the Middle East, or what Trump decides to post on Truth Social. Josh, back to you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
a day ago
- Yahoo
The S&P 500 just hit a new record — why it could keep surging
The S&P 500 (^GSPC) just hit its first record close since early February, which means a familiar talking point is also back in the market discussion. The S&P 500's valuation is back above both the five- and 10-year averages. This is often used as a way to describe stocks as "expensive." But as we've pointed out in the past, just because valuations are high doesn't mean they can't stay high for an extended period of time. It also doesn't mean they can't keep moving higher. The chart below from Exhibit A co-founder Matt Cerminaro shows that when splitting the S&P 500 into deciles organized by least and most expensive, the current market is far less expensive than the peak of the 2021 stock boom. For instance, the average stock in the most expensive bucket is trading at a 63 times forward 12-month price-to-earnings ratio, well below the 104 times forward earnings seen back in 2021. "Price earnings multiples are a function of investor confidence, which is a constantly moving target and has very little in the way of natural limits on either the upside or downside," DataTrek co-founder Nicholas Colas wrote in a note to clients on Wednesday. The S&P 500's most recent record close comes as the market has rallied more than 23% from its April 8 bottom. Now, strategists believe the market's largest tariff fears are behind investors. Economic forecasts have once again begun reverting higher, along with projections for corporate earnings this year. And Wall Street strategists are becoming incrementally bullish on the outlook from here. No fewer than 11 Wall Street firms lowered their S&P 500 targets amid the market sell-off in April. At least eight of those have since raised their bets on where the index will end 2025. The latest was BMO Capital Markets chief investment strategist Brian Belski, who raised his year-end target to 6,700 from 6,100 on Tuesday. "The signposts we called out in April are largely in place – markets are transitioning TO 'show me' FROM 'scare me,"' Belski wrote. "We believe performance is broadening, reactions from daily rhetoric are calming, and actual corporate guidance will increase coming out of the 2Q earnings reporting period." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
