Despite positive sentiment data from the University of Michigan, stocks have fallen to new lows, while bond yields hit new highs. U.S. bonds are acting differently than expected during geopolitical tensions. The NASDAQ index is under pressure, approaching its rising 100-hour moving average at 19,349.45. It has dropped to a low of 19,425.68 and is currently at 19,431, down 231.2 points or 1.18% for the day. The S&P index remains above its 100-hour moving average of 5,953.64. It reached a low of 5,983.83 today and is now at 5,986.81, down 0.96% for the session. Initially, the USD rose due to geopolitical tensions but later decreased during the U.S. session. The EURUSD is trading at 1.1538 after recovering from a low of 1.1488, close to its rising 100-hour moving average of 1.14775. The USDJPY has pulled back from its high of 144.48 and is testing its 200-hour moving average at 144.048. While market indicators don’t show alarm, key stock indices are declining from recent highs, which indicates a typical correction. The University of Michigan sentiment data did not spark a notable rebound, causing some concern. Despite rising yields, they remain below last week’s levels: 4% for the 2-year, 4.5% for the 10-year, and 5% for the 30-year bonds. The market’s response to conflict is unusual. Wider unease may stem from inconsistent policies and engagement issues. While China has reaffirmed past agreements, problems with Russia and Iran continue. The lack of new progress after discussions in Saudi Arabia is adding pressure, with upcoming deal deadlines raising urgency. The situation is clear: despite a positive consumer sentiment report, the markets are not responding as expected. Stocks are declining, with both the NASDAQ and S&P 500 falling. At the same time, Treasury yields are rising, which contradicts the usual pattern of falling yields during global uncertainty. This unusual response suggests that traders are considering other factors beyond sentiment or headline risks. For those observing the bigger picture, the drop in stock prices along with rising bond yields indicates a sort of market rebalancing. It is not panic but rather a natural correction within an overall upward trend. The NASDAQ is approaching its 100-hour moving average, where technical buyers may start to engage. If that average is tested or breached, we could see further movement. This is worth watching closely. In contrast, the S&P remains relatively strong, staying above critical levels for now, indicating varied reactions across sectors. Such divergences can signal upcoming market changes, especially when indices are close to short-term technical thresholds. In the foreign exchange market, the dollar initially gained due to geopolitical stress but then dropped as U.S. trading began. This suggests the initial rush to safety has lessened, partly due to a lack of continued escalation and potential position fatigue. The euro’s bounce from near its 100-hour moving average indicates ongoing buying interest at lower levels, making that area a key battleground for market direction. The yen is also behaving interestingly. After rising on early conflict news, it has settled near its long-term trend. Its bounce from the 200-hour average shows that traders are attentive to momentum signals. If it drops below that level, it could indicate further yen strength in the future. Currently, the market seems to be responding to waning momentum rather than a significant shift in flows. The yield curve has some unexpected developments. Although yields are up today, they remain below last week’s highs, indicating no major repositioning is underway. This suggests that expectations related to long-term policy and lingering headline risks are considered differently now. There appears to be hesitance to push yields too high in the current economic climate. The lack of significant risk-off behavior, despite ongoing tensions worldwide, indicates a disconnect between traditional strategies and current conditions. We see conflict without the usual rise in safe-haven assets. This likely reflects doubts regarding the follow-through of policies from major economies and uncertainties around trade and treaties that lack clear drivers. With China reaffirming past international agreements without substantial progress, and ongoing issues with Russia and Iran, the current news lacks direction. The stalled negotiations from Riyadh are adding to market tension. Traders are reacting more to frustration than fear, and that subtle difference influences strategy significantly. In summary, current technical factors are steering near-term market biases instead of emotions or raw data alone. The ongoing price action suggests close monitoring is necessary as markets approach levels that typically trigger significant trading activity. Decisions made at this point could shape market positioning for the rest of the quarter.

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