Trader Sentiment on the Verge of Shifting in WTI | Investing.com

Indices:

– U.S. equity index futures are in slight retreat following a red start to the week for the (-0.3% to 52,421), (-0.5% to 7,619), and more so the tech-heavy (-0.8% to 29,127) as an AI-related selloff weighed on sentiment (see Stocks below) following comments from Anthropic’s CEO and OpenAI’s Altman, while the climb in oil prices and Treasury yields added further pressure, the touching 5% its highest level since October 2023; market pricing (CME’s FedWatch) shows heavy favor (92%) for a 25bp as the FOMC begins its two-day policy meeting

Stocks:

– Shares of Nvidia (NASDAQ:) (-3.4%) finished lower in what was a tough session for the AI sphere following the latest comments regarding both OpenAI’s IPO and Anthropic’s CEO wanting to slow the pace of development, with AMD (-4.4%) and Intel (-5.6%) hit harder, so too memory chipmakers including SK Hynix (-7.6%) and Micron (-5.3%), with semiconductor equipment and computer hardware stocks all suffering

– Tesla shares (-1.8%) finished lower and so too SpaceX (-2%), but among Big Tech it was Microsoft (+2%), Alphabet (+3.1%) Meta (+2.7%) and Apple (+0.2%) that avoided a red close

– Among major tech names, software stocks enjoyed a positive session, but the real beneficiaries of AI-safety concerns were cybersecurity stocks and meant double-digit percentage gains for Palo Alto Networks (+13.1%), Okta (+12%), Zscaler (+16.5%) and CrowdStrike (+13.9%)

– Tough session for shares of Bank of America (-5.1%) after its CEO warned investment banking fees could fall more than 10% in the current quarter, and took plenty within the financial sector lower with it, especially those exposed to investment banking including Morgan Stanley (-3.6%) and Goldman Sachs (-4%)

– Strong gains for shares of Roblox (+12.7%) after unveiling new capabilities at its developers conference, and so too Rum Group (+11.6%) on reports of a six-year, $13.7 billion Anthropic computing deal

– Clear retreat for shares of Hewlett Packard Enterprise (-10.8%) hit by a downgrade out of Evercore ISI from outperform, though it kept its price target unchanged; Stellantis (-2.8%) also finished lower by the close as Morgan Stanley downgraded it to underweight and reduced its price target

– Meme stock movers: Nokia (-10.1%), GameStop (+2.2%), Avis (-2.5%)

– Crypto stocks: Coinbase (+9.2%) upgraded to neutral by Compass Point and a hike in its price target, MicroStrategy (+4.6%), Mara Holdings (-4%) after JPMorgan downgraded the stock to underweight and lowered its price target, Gemini Space Station (+7.9%), Bullish (+7.1%) upgraded to buy by Compass Point, Circle Internet Group (+7.5%)

Commodities:

– fell below a short-term support level and reached lows unseen in over a month before recovering partially this morning to $4,300, with the focus set to shift to Wednesday’s FOMC meeting where a rate hike is what’s likeliest but not fully priced in just yet, yields that were in for another climb, and a that went bid again on the FX front, with the losses yesterday larger for that has since gotten back above $63

– Oil prices () got as high as the $101s before falling back to the $99s as traders assess the offline pipeline and the extent to which it’ll damage already dwindling global supplies, as well as report regarding a supertanker hitting a mine; President Trump says Russia and Ukraine agreed to suspend strikes on energy infrastructure, and that he’s “open” to engaging with Iran; Department of Energy data shows SPR fell to 285m barrels last week, lowest since 1982

FX/Central Banks/Crypto:

– at one point neared its short-term resistance level before falling back below $78K ahead of the Clarity Act Senate procedural cloture vote scheduled for today that’ll need a supermajority to pass and then there’s the Fed decision tomorrow, with small inflows on the ETF front prior, and key technical levels less likely to hold in the face of the fundamental events; Ether’s move to $2.6K failed to stick moving back to around $2.5K and its underperformance taking the Ether/Bitcoin ratio below 0.032

– improves within the 99 handle as elevated oil prices keep energy-exposed currencies at bay, with the focus on rising yields that’ll likely experience a volatile move depending on the Fed’s decision tomorrow, where market pricing shows its heavily in favor of a rate hike; briefly neared 155 with traders bracing for central bank decisions this week that’ll impact both aspects of this pair

– European Central Bank President Lagarde warned that Europe faces an unprecedented risk of being cut off from AI and must build its own AI, and Schnabel that recent energy-price developments are “quite concerning,” adding it’s “not just oil, but also diesel” and that reduced refining capacities “can’t be rebuilt quickly”

Capital.com Client Sentiment:

– Indices: Long sentiment climbs a notch in the S&P 500 (74% from 73% yesterday), Nasdaq 100 (64% from 63%) and Dow 30 (75% from 74%); elsewhere reaches extreme buy in the (79% from 75%) following the pullback while moves away from it in the (72% from 76%) following the partial recovery

– Commodities: Heavy buy but down a couple of notches in gold (to 75% from 77% at the start of this week) while little changed in silver (87%), and on the verge of shifting in WTI (slight sell 52% from a majority short 55%)

– FX: Moves away from the middle in (slight buy 54% from 51% yesterday), and shifts in (from the middle to a slight sell 52%)

Data:

– Canadian holds at 3% y/y in August, m/m -0.1% and core 0.2%

– Chinese retail sales in August up only 0.4% y/y, a miss; 5.3% a notch higher than anticipated; fixed asset investment (ytd) worsens to -7.2%, ongoing new home price contraction; while industrial production (y/y) improved to 5.2% from 4.5%