Market Wrap US-Europe 10 August: Wall Street Stalls as Oil Jumps 5 Percent

By The Edge Research Team

Wall Street stalled on Monday as a 5 percent surge in oil revived the inflation question two days before US consumer price data, pulling Treasury yields higher and taking the shine off Friday’s jobs-report rally. The Nasdaq Composite slipped 0.32 percent, the S&P 500 closed near flat, down 0.06 percent, and the Dow Jones eased 0.11 percent, per CNBC, while Europe closed mixed earlier, with the Euro Stoxx 50 up 0.18 percent and London’s FTSE 100 down 0.35 percent. Gold pushed higher into the close and Bitcoin fell almost 2 percent.

In the United States, the stall was shallow given the size of the oil move. The Nasdaq Composite closed at 26,605.36, down 0.32 percent, the S&P 500 at 7,753.11, down 0.06 percent, and the Dow Jones at 53,975.98, down 0.11 percent, per CNBC, giving back only a modest fraction of Friday’s rally. The pressure showed instead in rates and volatility: the 10-year Treasury yield rose 4.3 basis points to 4.701 percent and the VIX snapped two days of declines with a 3.76 percent climb to 15.46, as doubts over a US-Iran arrangement on Strait of Hormuz tanker traffic sent crude and refined products surging, per CNBC, and shifted attention to Wednesday’s consumer price report.

In Europe, the session split. The Euro Stoxx 50 added 0.18 percent to 6,535.62 and Paris’s CAC 40 rose 0.13 percent to 8,726.03, per CNBC, while Germany’s DAX closed effectively flat, up 0.02 percent at 26,323.88, and London’s FTSE 100 fell 0.35 percent to 10,862.50, the region’s only sizable decline. The continent closed with the oil surge still building through the afternoon.

In commodities, the day belonged to energy, as covered in our commodities wrap: Brent settled up 5.07 percent at 87.79 dollars a barrel and West Texas Intermediate 5.14 percent at 82.20 dollars, per CNBC, and late trading held nearly all of the move, with Brent at 87.67 dollars around the US equity close. Gold extended its climb to 4,447.20 dollars an ounce in late trading, up 1.08 percent, adding to the metals run that began with Friday’s jobs data.

In currencies and crypto, the inflationary tape firmed the dollar. The yen weakened 0.97 percent to 159.31 per dollar and the euro eased to 1.1542, per CNBC, while sterling edged up to 1.3506. Bitcoin fell 1.76 percent to about 64,000 dollars, the Egyptian pound held near 49.83 per dollar, and the Kuwaiti dinar stood at its official reference of 0.3071 per dollar.

For reference, Monday’s closes from our MENA-Asia wrap showed Asia surging, led by the Kosdaq’s 6.97 percent jump and the Nikkei’s 2.08 percent gain, while the region split, with Saudi Arabia and Oman higher, the UAE lower on its return from the weekend, and Egypt easing below Sunday’s record after a fresh intraday high.

Why it matters: Monday put the week’s two forces in open contest and ended roughly even, our reading. A 5 percent oil surge on Gulf transit doubts produced only a fractional equity decline, which says Friday’s rate-relief trade still carries real weight; but the tape’s second layer shows insurance being bought against Wednesday, with yields up, the VIX snapping back above 15, and Bitcoin falling while gold climbs. An S&P 500 that closes four and a half points from flat between a jobs shock and an oil shock is not indecision, it is balance, and it hands Wednesday’s consumer price report the deciding vote: a cool print re-arms the relief trade, while a hot one would land on a market that just watched energy costs jump, reopening the whole rate debate about the months ahead.

Outlook: Tuesday brings the EIA’s Short-Term Energy Outlook, the first official forecast update since the OPEC+ decision and a direct test of how constrained Gulf transit reshapes the supply picture, our reading. Wednesday’s July US consumer prices at 3:30 PM Kuwait time follow, with the EIA’s weekly inventories the same evening. The markers are whether oil consolidates Monday’s surge into the STEO, whether volatility extends Monday’s rise, and whether Asia’s rebound momentum survives a flat Wall Street lead.

Table – US equities, 10 August close, ranked by change:

Table – Europe equities, 10 August close, ranked by change:

Table – MENA and Asia, Monday 10 August closes, for reference, ranked by change:

Table – Commodities, intraday 10 August, ranked by change:

Table – Currencies, rates, volatility and crypto, intraday 10 August, ranked by percent change:

Sources: CNBC.

Get Complimentary Insights

Follow us