Market Regime Summary Mon 2026-05-04

Day-over-day shift vs 5/1

Friday's "digestion not extension" call resolved decisively to the downside. Iran strikes UAE + US Navy show of force in Hormuz blew the lid off the cooling-oil narrative: WTI 101.94 → $104.20 (+2.22%) with Brent +6% through $115; VIX re-armed 16.99 → 18.29 (+7.65%) and VVIX 95.17 → 98.29 closing in on 100. Friday's bond yellow flag became today's red: 30-yr cleared 5.0%, 10-yr 4.45% (+7bp) within 5bp of 4.50%. Crucially, HYG broke below its 50MA (79.80 vs 79.98) — first credit-cushion breach of the run. Breadth decelerated again (55.06 → ~53.87); 10 of 11 sectors red. SPX saved by 7,200 + tech defense. Net: trim 0.6%/3-spread → 0.5%/2–3-spread, re-pause C-9-1 and C-1-5, tighten profit-takes to 40–50% — not 4/29-style panic, but Friday's yellow flags converted to amber. Iran is back as the regime driver into NFP Friday.