$CL The biggest wildcard for the markets this weekend was that crude oil, which had been surging all along, finally paused for a breather.
Last Friday, all three major U.S. stock indexes closed lower amid debate over AI capital spending, with only $SOXL barely holding up. Then over the weekend, Brent crude pulled back sharply from a seven-month high of 117 to 109, and WTI also fell below 101 this morning. The chart is showing a textbook five-wave pattern. Add in contract rollovers and profit-taking by earlier bulls, and the short-term short-squeeze pressure has finally been substantially relieved.
With oil prices retreating, the taut nerve of high inflation has eased a little. So U.S. stock futures surged across the board this morning, led by Nasdaq futures. On top of that, Trump is once again floating the possibility of a meeting between the U.S., Russia, and Ukraine, so the geopolitical premium has also receded a notch.
Put simply, right now crude oil and U.S. stocks are on a seesaw. As long as oil is willing to back down, easing inflationary pressure can give the broader U.S. market a window to catch its breath and recover. But if oil keeps clinging to elevated levels, stocks will have to keep slogging it out.
Last Friday, all three major U.S. stock indexes closed lower amid debate over AI capital spending, with only $SOXL barely holding up. Then over the weekend, Brent crude pulled back sharply from a seven-month high of 117 to 109, and WTI also fell below 101 this morning. The chart is showing a textbook five-wave pattern. Add in contract rollovers and profit-taking by earlier bulls, and the short-term short-squeeze pressure has finally been substantially relieved.
With oil prices retreating, the taut nerve of high inflation has eased a little. So U.S. stock futures surged across the board this morning, led by Nasdaq futures. On top of that, Trump is once again floating the possibility of a meeting between the U.S., Russia, and Ukraine, so the geopolitical premium has also receded a notch.
Put simply, right now crude oil and U.S. stocks are on a seesaw. As long as oil is willing to back down, easing inflationary pressure can give the broader U.S. market a window to catch its breath and recover. But if oil keeps clinging to elevated levels, stocks will have to keep slogging it out.
