A warning before the market opens on Monday

Source: Wall Street Intelligence Circle

The most important thing to watch on Monday is not the market open itself, but rather the "second act" during the European and New York sessions.

Before Monday’s opening, new variables emerged in the Middle East situation:

According to Yemeni television, the Saudi-led coalition launched an attack on Houthi military targets late Saturday. In addition, the Houthi forces announced a blockade of Saudi ports and attacked two oil tankers associated with Saudi Arabia in the Red Sea.

In the past, Houthi attacks mainly targeted commercial ships in the Red Sea, but this time they directly hit Saudi Arabia by targeting the country’s oil exports themselves.

There are two key points to understand:

· The first shipping route—the Strait of Hormuz—is the main passageway for oil exports from Persian Gulf countries.

· The second shipping route—the Red Sea—is a "backup lifeline" prepared by Saudi Arabia. Saudi Arabia’s eastern oilfields are connected via east-west pipelines to Yanbu, then exported through the Red Sea, making it a key alternative pathway. If even this backup route is affected, the uncertainty of global oil supply will be further amplified. The biggest change now isn’t the scale of war, but rather the risk beginning to "spread". What started as a simple "Iran war driving up oil prices" is evolving into "the entire Middle East oil transportation system facing a stress test."

Another piece of information worth noting:

After 13 consecutive days of U.S. airstrikes on Iran, there was a sudden pause from Friday night to Saturday—the final explanation rests with Trump, which could be good news (opening a window for negotiations), or bad news (preparing for a larger-scale operation redeployment).

First, when the market opens on Monday, pricing is not just about "how many points oil jumps or stocks drop"—it’s about judging a bigger issue: whether oil prices can "materialize" the Red Sea risks from the weekend. If oil prices "gap up" and do not decline during trading, it indicates the market sees the risks as real. If prices quickly fall after the gap up, it means the market still treats this as a digestible short-term shock. In other words, what the market cares about most is the "second act" after the opening.

Second, it’s worth mentioning that the 10-year U.S. Treasury yield is approaching 4.70% (Trump’s "political pressure line," but not an automatic rescue trigger), which gives Trump room to make concessions. However, even if Trump wants to calm markets, he’s unlikely to act during the Asian session, at least not before the U.S. market opens.

Monday is not a day for confirming a direction, but a day for testing risks.