June S&P 500 E-Mini futures (ESM26) are down -0.01%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.01% this morning, taking a breather after a three-day rally, while investors turn their attention to the first Federal Reserve meeting under Kevin Warsh.
The price of WTI crude fell more than -2% on Tuesday as expectations that the Strait of Hormuz would reopen this week continued to unwind the geopolitical risk premium embedded in the market. U.S. President Donald Trump said on Monday at the start of the Group of Seven talks that “the deal is already signed and the strait is already partially opened,” adding that “ships are starting to go out now, and on Friday it will be completely opened.” Meanwhile, Morgan Stanley and Goldman Sachs lowered their oil price forecasts for the coming quarters, with the latter now expecting Persian Gulf exports to return to pre-war levels by the end of July. The 10-year T-note yield fell three basis points to 4.45% as lower oil prices eased inflation concerns.
