Yields at 2002 highs, and the Nasdaq at a record too

Good morning. Yesterday the US market sent two opposite signals at once. The 10-year Treasury yield touched its highest since 2002, yet the Nasdaq set a fresh record. Megacap AI names like Nvidia, Microsoft and Meta rose enough to drown out the rate worries.

The catch is how narrow this rally is. The Dow fell for a fifth straight week to its lowest since May, and more than half of S&P 500 stocks are below their 200-day average. When the gap between the Nasdaq and the Dow stretches like this, some read it as a sign of either a big surge or a deep plunge ahead. In credit markets, warnings keep piling up about rising delinquencies on commercial real estate loans.

Europe looks shaky. French fiscal worries widened the gap between French and German bond yields, and Spain's prime minister calling an early election pushed the euro to its weakest against the dollar in 17 months.

Oil calmed a bit. As more ships pass through the Strait of Hormuz, Saudi Aramco cut its Asian selling prices to a six-year low, and Brent hovered around $100. Aramco's CEO, however, said rebuilding depleted inventories could take two years, a reminder that prices aren't out of the woods.