Category: Newsletter

Softer July payrolls and downward revisions eased expectations for a September Fed hike, while moderating wages and lower oil prices supported duration, gold, and rate-sensitive equities. Strong earnings and AI-led semiconductor gains propelled U.S. stocks to records, reinforcing a constructive risk backdrop ahead of CPI; sticky inflation remains a threat.

Oil’s spike proved short-lived as Trump signaled a truce with Iran over the Hormuz corridor, sending Brent tumbling over 6% from its highs, but the bigger story was a genuinely divided Fed holding rates under new Chair Warsh while yields surged. Equities still gained on strong earnings, though AI-era winners and losers split sharply: Microsoft and Amazon soared while Meta and Apple stumbled.

Markets closed a volatile week lower as oil, inflation fears, and mega-cap tech earnings collided. Brent crude swung wildly on Middle East escalation before a US-Iran strike pause brought relief, while Alphabet and Tesla’s soaring AI capex spooked investors, dragging the Nasdaq down nearly 2%.

Oil spiked 10-14% as US-Iran strikes intensified Hormuz tensions, while soft CPI/PPI data eased Treasury yields but left Fed rate-cut odds hanging on energy-driven inflation risks. US equities slid on AI capex jitters, with semiconductors and Netflix leading losses despite strong Q2 earnings. Gold dipped toward $4,000 before recovering, torn between dovish inflation and hawkish oil-driven rate expectations.

Geopolitics dictated market tone last week as Hormuz-linked oil volatility, a hawkish Fed tilt, and rising yields tested investor nerves. Yet US equities ground out gains, powered by Meta’s blockbuster rally and SK Hynix’s record-breaking IPO. Focus now shifts to a pivotal week ahead with CPI data, Fed Chair Warsh’s testimony, and Q2 earnings season kicking off. And, of course, the renewed escalation in hostilities between US and Iran.

A U.S.-Iran diplomatic breakthrough triggered a de-escalation pivot across global markets, sending oil prices down 8.70% as the Straits of Hormuz partially reopened. U.S. equities saw a sharp rotation out of tech into defensives, while Treasury yields retreated on deflationary relief. Eyes now turn to a holiday-shortened week packed with front-loaded labor data that will test Fed Chair Warsh’s hawkish resolve

The US–Iran ‘ceasefire’ eased energy supply fears and lifted risk sentiment, while the Fed’s June meeting and new Chairman Warsh delivered a sobering reminder that inflation remains unfinished business. With rates held at 3.50–3.75% and a potential hike back on the table, markets are repricing the path to easier policy. AI-driven equities and India stood out as bright spots amid the recalibration.

A blowout US jobs report — 172,000 nonfarm payrolls against an 80,000 consensus — sent rate-hike odds surging to 70% by year-end, erasing all hopes of 2026 cuts.

Equities sold off sharply, with the Nasdaq plunging 4.7% on the week as Broadcom’s guidance disappointed, while US-Iran ceasefire talks collapsed by Friday, keeping oil elevated and gold under pressure.

A US-Iran ceasefire offered markets a brief reprieve, driving a sharp rally in risk assets and pushing the S&P 500 to its strongest weekly performance in months. Yet “warflation” remains the dominant theme — sticky PCE inflation, elevated oil prices, and a near-closed Strait of Hormuz are forcing central banks to recalibrate toward higher-for-longer rates. Gold, tech, and industrial metals emerged as the week’s standout performers amid the cautious optimism

A week of two halves early AI-driven losses and geopolitical friction gave way to a sharp Friday recovery after the Supreme Court struck down sweeping global tariffs, lifting the Nasdaq to its first positive week since January. 

However, the full impact of the ruling which may prove more nuanced, plus a divided Fed, sticky core PCE, and emerging private credit liquidity concerns keep the macro outlook unsettled.