All three major indexes in the US closed sharply lower overnight, near worst levels, as escalating Middle East conflict dampened risk appetite. The Dow Jones fell 333 points (-0.98%), trading lower all day, down 399 points at worst. The S&P 500 and NASDAQ are now down for the week, losing 1.34% and 1.62% overnight. US Small caps Russell 2000, down 2.11%, and Wall Street’s Fear gauge, the VIX, jumped 7.5%. Higher risk-free treasury yields also dulled the appeal for stocks, with the 10Y yield rising another 7.7 basis points and safe haven gold hitting its highest level in more than two months, up 1.36%. Reporting season is in full swing. Morgan Stanley fell 6.8% on disappointing profit figures, and Netflix and Tesla reported after the closing bell, with Netflix jumping 12.2% while Tesla fell another 1.62% after falling 4.8% during regular trade.

ASX to fall. SPI Futures down 83 points (-1.17%).

• Base metals mixed from better-than-expected economic data from China. Copper -0.06%, Nickel -0.13%, Aluminium +0.18%, Zinc +0.14%, Lead ++0.50%, and Tin up 0.55%.
• Oil prices rose as to a two-week higher on bigger-than-expected US storage draw and supply concerns after Iran called for an oil embargo on Israel over the conflict in Gaza. Brent Crude up 1.06%, and WTI up +0.98%.
• 10Y yield: US 4.90%, Australia 4.65%, and Germany 2.92%.

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