WS #16056
Capital is rotating out of growth and into defensive sectors, with energy and defense stocks posting significant gains. Targa Resources led the S&P 500 heavyweights with a 4.37% rise, while ExxonMobil and RTX also climbed over 2.5%. This rotation is supported by the ongoing geopolitical tension in the Middle East, which keeps oil prices elevated, and a general flight to safety amid the tech rout. The VIX spiked 21.4%, confirming the defensive posture. Geopolitical risks remain elevated with US Central Command reporting that Iranian-backed militias are sending money to the IRGC, reinforcing the escalation narrative. The closure of the Strait of Hormuz continues to constrain oil supply, keeping Brent crude above $110. While this supports energy equities, it poses a headwind for global growth and inflation expectations, contributing to the broader market's risk-off sentiment.
Defensive Rotation and Energy Strength
Capital is rotating out of growth and into defensive sectors, with energy and defense stocks posting significant gains. Targa Resources led the S&P 500 heavyweights with a 4.37% rise, while ExxonMobil and RTX also climbed over 2.5%. This rotation is supported by the ongoing geopolitical tension in the Middle East, which keeps oil prices elevated, and a general flight to safety amid the tech rout. The VIX spiked 21.4%, confirming the defensive posture.
Geopolitical risks remain elevated with US Central Command reporting that Iranian-backed militias are sending money to the IRGC, reinforcing the escalation narrative. The closure of the Strait of Hormuz continues to constrain oil supply, keeping Brent crude above $110. While this supports energy equities, it poses a headwind for global growth and inflation expectations, contributing to the broader market's risk-off sentiment.