09.06.2026 - Calm after short Storm
Markets quickly stabilized after last Friday's shock, when investors got caught by a surprisingly strong US labor market report.
Since then, markets have received exactly the messages they wanted: easing tensions in the Middle East compared with yesterday, lower oil prices, and a fresh rebound in semiconductor stocks.
A sign that sentiment had become fragile was the renewed effort by US President Donald Trump to calm investors through a series of posts on Truth Social and interviews, highlighting new investments and once again expressing confidence that an agreement with Iran could be reached soon. His comments also helped put downward pressure on oil prices.
The VIX Index, which measures implied volatility in the S&P 500, jumped from 16 to above 21 on Friday before quickly retreating below 19, allowing investors to regain confidence.
Markets:
Equities: Global equity markets higher, led once again by technology and semiconductor stocks
Bonds: Yields little changed as investors await tomorrow's US inflation data - US 10-year Treasury yield 4.54%, Japanese 10-year yield at 2.67%
Commodities: Oil prices lower on hopes of easing Middle East tensions - WTI USD 88, Brent USD 91. Precious metals down with gold at USD 4’310, silver USD 67
Cryptos: sideways after sell-off - Bitcoin USD 62k.
Currencies: USD lower today - remains in narrow trading range
Volatility: VIX back below 19 after briefly surging above 21 on Friday
My View: In my weekend newsletter, I highlighted the VIX as the key indicator to monitor this week. The rapid stabilization in volatility made it relatively obvious that investors would once again return to buying the dip.
Supported, of course, by a certain person posting at exactly the right moments. How many times have we heard that an Iran deal is only hours or days away by Donald Trump? Who still believes these statements? I can no longer hold back: this is market manipulation at its finest.
As long as the AI trade keeps working, investors remain willing to step back into risk. The question is: for how much longer?
Beneath the surface, conditions are becoming increasingly unstable. Friday's sell-off was a clear warning sign. Anyone who failed to recognize how quickly sentiment can change is taking the risk of substantial losses that could materialize starting within days or weeks.
No one can predict the exact timing of a major correction or the beginning of a bear market. However, more and more indicators are flashing warning signals. When even major US financial institution, Bank of America, begins advising clients to take profits because their own indicators are showing elevated risks, the situation deserves attention.
I started highlighting these warning signs at a much earlier stage. Since then, conditions have only become more extreme. Things are becoming increasingly irrational.
Tomorrow's US inflation report adds another important piece to an already fragile market environment.
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