Oil Plunges Amid US-Iran Tensions as Fed Meeting Looms

Oil prices plummeted on Monday as the US and Iran exchanged attacks for dialogue. Despite the turmoil in global politics, Wall Street and Treasury yields remained relatively stable, with investors focused on upcoming big tech earnings reports and the Federal Reserve's policy decision later this week.

The Fed meeting is now just 48 hours away, and markets are pricing a quarter-point hike at around one-third probability. This level of uncertainty is unusual in the era of forward guidance, but new Fed Chair Kevin Warsh has abandoned that approach.

Meanwhile, benchmark global oil prices sank between 7% and 9% on Monday, their biggest fall in over two months. However, Treasury yields only modestly declined, with the 10-year yield closing at 4.64%, just 7 basis points off last week's peak above 4.71%. This suggests that investors don't expect a lasting impact from the latest US-Iran detente.

Additionally, Chinese chipmaker CXMT Corp soared over 500% on its trading debut on Monday, becoming China's most valuable listed company. Nvidia is also reportedly in talks to provide $250 billion in financing guarantees for OpenAI as part of a massive data center project.