Midday Mashup
Published
The relief rally sparked by hopes of a Hormuz de-escalation is holding into the afternoon, but the underlying picture is far messier than this morning's oil-driven bounce suggested. Brent has extended its slide to below $104 a barrel even as a senior Iranian official told Reuters the strait will stay closed and there will be no nuclear talks until Iran's conditions are met. At the same time, other Iranian sources describe a more constructive back channel, with messages exchanged on reopening the strait in exchange for sanction relief and technical-level talks in New York, joined by Qatari experts, described as moving into a positive phase. A US official says roughly 40 million barrels have transited Hormuz in the past 48 hours and that Washington, controlling the strait, feels no urgency to strike a deal.
Equities are shrugging off the ambiguity. Chip and cloud names are extending the morning's gains, with ON Semiconductor up 5.9%, Datadog up 5.9%, Credo Technology up 9.2% and Dell Technologies up 6.5%, while the VIX has dropped 6.0%. Energy and cyclicals lag as crude falls, with Talos Energy down 4.1%, SM Energy down 4.0%, LyondellBasell down 3.9% and Cboe Global Markets down 3.9%. Humana is up 6.4%.
The Trump-Xi meeting wrapped with both sides describing a "constructive" relationship and plans for tariff exemptions on agricultural, medical and low-tech goods, with full details due Monday; USTR Greer says AI chip and export-control issues stayed off the table. Trump plans further meetings with Xi in November in China and at the December G20 in Miami.
None of this is stopping Treasury yields from climbing. The 10-year hit a fresh 19-year high near 5.23%, and the 30-year broke above 5.5% for the first time since 2004, even as stocks rally, a divergence Fed's Schmid underscored by calling US debt levels "extreme" and questioning whether the AI buildout is becoming too big to fail.
Elsewhere, the yen strengthened after Bessent and Japan's Katayama reaffirmed concerns over its undervaluation, BASF confirmed preliminary talks to acquire Evonik, and SK Hynix's Solidigm unit is said to be eyeing a 2027 IPO at a $150 billion valuation.