"You'll soon find out" was enough to push the S&P 500 off of all-time highs today. President Trump's comments regarding retaliation to the Iranian downing of a highly advanced, $123 million US drone caused stocks, buoyed by yesterday's dovish Fed comments, to retrace by 2%. The market's assumption was that a counter-strike was imminent, but Trump later cast a shadow on this interpretation by suggesting the incident wasn't intentional.
Regardless, oil prices surged on the news, up 5.5% to nearly $57/barrel, and gold was up nearly 2% to $1,386/ounce.
Trading Thursday was dominated by expectations of a 50 basis point cut in the July FOMC meeting. Yields fell further, taking 10 year Treasuries just below 2%, the pool of global debt at negative yields reached a new high of $12.47 trillion. The USD was broadly sold, taking the US Dollar Index down to support at the 200 day moving average of 96.62.
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