In today’s market wrap, we see a mixed bag of performance with the overall market recovering from early session lows. The latest headlines out of the Middle East have sparked some optimism, with an Iranian source claiming that there has been US “outreach” and Tehran “willing to listen.” This has led to a mid-morning rally in the market, with the Russell 2000 (RTY) outperforming the S&P 500 (SPX) and the Nasdaq Composite (NDX).

Breadth analysis reveals mixed performance across the S&P 500, with 299 names currently trading up on the day. However, equal-weighted SPX is outperforming the market-cap weighted SPX by 110 basis points. Megacaps (excluding Apple and Tesla) are seeing the biggest downside drivers of the tape, which could be a sign of profit-taking.

In terms of momentum, we see a strong showing today with the “right way” price action (+400 basis points) on track for its best day in 10 sessions. Momentum is being driven primarily by the short leg of momentum, with 12-month losers trading at -255 basis points versus the long leg of momentum at +150 basis points. This could be a sign that investors are rotating out of defensive positions and into more cyclical names.

Interestingly, we see a resurgence of focus on private credit today, with redemption headlines making the rounds. Apollo has curtailed redemptions from its Apollo Debt Solutions fund at 5% after requests to redeem 11.2% of outstanding shares for the quarter, while Ares has limited withdrawals from its $10.7bn private credit fund. This could be a sign that investors are becoming more risk-averse and seeking shelter in safer assets.

Single stock activity remains subdued, with exchange volumes down 13% versus the 20-day average. Price action continues to be dominated by macro hedging, with ETF tape tracking at 39%. Liquidity remains poor, with the S&P Top of Book sitting at $4.39mm.