After the crash, the world suddenly became quiet

Source: Wall Street Intelligence Circle

Silence is a state of hovering.

The global market opened extremely quietly on Friday:

Gold and U.S. stock futures have not rebounded after a sharp plunge, but the decline has slowed;

Oil prices gave back some gains after surging overnight;

The 10-year U.S. Treasury yield touched 4.70%.

The slowing of the drop does not mean buyers have returned. Gold and U.S. stock futures did not continue to accelerate downward after the sharp decline, which is a good thing, but it does not mean the market has stabilized.

The real difference is: If there is a rebound after the decline has slowed, it means money is beginning to come in; if prices just flatten out without rebounding, it means sellers have paused, but buyers are not willing to enter the market either. Currently, it looks more like the latter.

Friday feels more like a “validation day,” not a “reversal day.” On Thursday, the market had already priced in the bad news. What needs to be validated on Friday is whether oil prices will continue to spiral, U.S. Treasury yields can stop at 4.70, if the dollar will continue to strengthen, if there is buying in U.S. stock futures, and if gold can hold above 4000. If none of these worsen, the market may stabilize, or even see a technical rebound. But if, before or after the New York session, oil prices surge again, yields hold above 4.70, and stock futures keep falling, then last night’s drop will morph from a “one-off shock” into a “continuous revaluation.”

In the past 24 hours, several cracks have appeared simultaneously in the market’s trading narrative.

AI is being revalued; the most notable thing last night was not that the S&P fell 1%, but that tech stocks fell much more severely than the index.

Brent crude has climbed back above $100, reactivating a familiar chain: oil prices rise → inflation pressure increases → U.S. Treasury yields rise → tech stock valuations fall.

The U.S. Treasury yield is now approaching a “cannot be ignored” level. The 10-year yield is near 4.7%. Many wonder, what difference does 0.1 percentage point make between 4.6% and 4.7%? Actually, it’s not about the number, but the psychology.

The Middle East situation is no longer just news; the scope of a second round of military conflict could be much wider than the first.

The Fed has suddenly become much more passive, with the probability of a rate hike next week rising to nearly 40%.

For the past year, the market almost believed all negative factors would pass: AI would make money, oil prices would fall back, the Fed would cut rates. But now, all three beliefs are being challenged at the same time. At least since last night, investors are no longer willing to buy on dips as decisively as before.