Trump Rejects Iran's Seven-Day Plan as Oil and Yields Climb

Trump said no to Iran's seven-day Hormuz plan. Araghchi said Friday it had gone through Qatar, offering to reopen the strait within a week if the US lifted its blockade and waived oil sanctions. The Wall Street Journal says Trump has told aides he expects strikes to resume after the midterms, though he told Axios he expects talks this week. WTI is up more than 3% to near $96 and the ten-year is back over 5.2%. SPX closed Friday at 7,743.41. Premarket 7,706.

It's the offer an Iranian official floated a week ago, now formal, and Friday's rally ran on it. Oil fell and SPX added 0.5% with the ten-year at 5.18%, its highest since the financial crisis, the second session running that stocks shrugged off the long end on the hope that Hormuz reopens and crude follows. The weekend took that away. Gold usually catches a war headline, and it's under $4,200 at a seven-week low, so the market is reading more oil as an October hike, already priced around 70%. PCE and Micron land Wednesday, payrolls Friday.

The profile flipped back overnight, from close to four to one positive Friday to about two and a half to one negative, and premarket sits inside the densest block on it, 7,675 to 7,710. The put wall is 7,675 with 7,700 nearly as heavy. Dealers are short gamma through that band, so moves travel further than they should. The flip at 7,730 is clean, with prior demand at 7,725 and 7,735 either side, and above it the gamma is thin up to the call wall at 7,775. Underneath, the put wall sits with three prior demand levels and both the 20-day and 21-day averages inside ten points, and that's where I'd expect this to stop first.

Rallies into 7,725 are for selling while price is under the 7,730 flip, for 7,713 and 7,698. The buy is lower, at 7,676, where the put wall and both averages sit. A close back over 7,735 ends the short and opens 7,746 and 7,763. Losing 7,670 opens 7,650 and the 50-day at 7,636.