THURSDAY MARKET UPDATE

Oil crossed $100 overnight and the fear gauge went back to sleep. One of those is a mistake.

Chinese refiners spent Tuesday bidding up African and Canadian crude, because the usual route stopped working. Owning your supply chain used to be a cost line. It's turning into the whole business.

-Nathan Reed

THE YEN IS MOVING GOLD. NOT IRAN

The US destroyed five Iranian tankers. Gold opened lower, near $4,400 an ounce, then climbed back through the morning. That's the wrong reaction for a fear trade.

The metal isn't trading the war. It's trading currencies. A sharp rally in the Japanese yen pulled the dollar down overnight, and a softer dollar makes dollar-priced metal cheaper for everyone who doesn't earn dollars. That's plumbing, not panic.

Silver is the better tell. At $66.94 it's off slightly today but up roughly 4.9% on the week, holding its range through the whole escalation while gold chopped. Industrial demand is carrying it. Gold has sat between $4,300 and $4,500 for three weeks. Friday's inflation number breaks the range

THE DOW LOST 627 POINTS. THE VIX YAWNED

The Dow closed Tuesday down 627 points, or 1.18%. The damage landed in expensive software — ServiceNow fell 5%, Salesforce and Intuit about 4% each — as the 10-year Treasury yield pushed to a cycle high of 4.81%. Brent is above $100 for the first time since July.

Here's the part that doesn't fit. The VIX — the market's fear gauge — closed at 15.7 and sits near 15.6 this morning. That's a level that historically means nothing is wrong. Equity investors are pricing a shooting war over the world's most important oil route as a sector rotation. The forward earnings estimates underneath the S&P 500 still assume energy and freight costs go back to normal. Neither line has been marked to a hundred-dollar barrel.

"The bond market repriced this three weeks ago. The stock market is still waiting for permission. That fear gauge isn't calm — it's asleep"

INTEL, NOVARTIS, SERVICENOW

Intel  $INTC ( ▼ 0.42% ) — a supply-chain report says it will raise PC processor prices about 10% in October; one broker lifted its target to $120.

Novartis  $NVS ( ▼ 13.93% ) — its cholesterol drug missed its main goal in a trial of 8,323 patients, and Amgen fell hard on the read-across.

ServiceNow  $NOW ( ▼ 4.99% ) — led the software decline alongside Salesforce and Intuit as long-dated valuations met a cycle-high yield.

Qualcomm  $QCOM ( ▲ 3.16% ) — rose as Samsung, TSMC and Intel all committed to the next generation of chipmaking equipment.

For real-time data, I recommend monitoring Finviz.

APPLE | Apple holds its launch event today — the first under new chief executive John Ternus, with a foldable iPhone expected.

SPACEX | SpaceX's post-listing lockup expired today, freeing 319 million shares to trade.

RATES | Roughly $1.5 trillion of AI company debt is crowding dealers out of Treasuries, quietly lifting yields.

BIOTECH | Roivant surged 20% on early data for a lung-pressure drug — biotech's one bright spot Tuesday.

INFLATION | Producer prices land Thursday and consumer prices Friday — the last inflation reads before the Fed.

Producer prices tomorrow. That's where the theory finally meets a number.

Nathan Reed | Profits & Insights