Oil Prices Take a Reprieve, but Upside Risks Loom

AI capex arms race hits an inflection point

Key Takeaways

• The Rally Loses Momentum: Despite the fact that oil prices are up nearly +40% since the eve of the war, the S&P 500 has still managed to post a +8% advance. That said, the S&P 500 stock market has been flat since mid-May and struggling these past two weeks. The major indexes all tested or undercut further support levels yesterday. Even before the latest pullback, the S&P 500 had been punctuated by bouts of volatility and rapid sector rotation. Until there is a clear uptrend established once again, investors would be wise to err on the side of caution.