Oil eases on Russia sanctions waiver as stocks await earnings

Monday morning, and a new week begins. Last week ended with the Nasdaq down nearly 4% and the S&P 500 having its worst week since June. The epicenter was AI debt worries that began with CoreWeave, and the VIX fear gauge topped 22 for the first time in four months. U.S. markets were closed to trading over the weekend, so this morning is about carrying last week's shock into whatever comes next.

The biggest weekend headline was oil. President Trump invoked a national-interest exemption two days before a Russia sanctions law was due to take effect, putting off new tariffs on Russian goods and on major buyers of Russian energy. Hopes for more Russian fuel supply pushed oil lower on Sunday. But Ukrainian drones also hit a major Russian oil terminal, so it's too early to say that WTI, which closed above $100 on Friday, has settled down.

The bond market is worth watching too. Even after the inflation shocks, Treasury yields fell late in the week, which some read as the market's focus shifting from prices to an AI bust and a possible recession. The Bank of England and the IMF warned that crowded hedge-fund trades and leverage could amplify any shock in bonds.

This week the market waits for big-tech report cards. Meta and Tesla need to show that AI spending is paying off, and with Treasury yields now sensitive to those results, they matter beyond stocks. BofA is advising a defensive stance until after the midterms and the next FOMC meeting.