Market Report.
📉The market has corrected following the unexpectedly hawkish comments from the new Fed chairman, Kevin Warsh. For this reason, I believe that one of the crucial factors could be today’s PCE data from the US. The PCE is the Fed’s most reliable inflation indicator, and if it continues to rise (we have now seen three consecutive periods of increases), it will make the markets even more nervous amid fears of a possible interest rate hike or something worse (credit tightening via the bond market).
🏛️Treasury Secretary Scott Bessent has voiced strong support for the approach taken by new Federal Reserve Chairman Kevin Warsh at his first FOMC meeting on June 17, according to recent statements.
🗓️At that meeting, Warsh opted not to submit his own “dot” in the dot plot and removed forward guidance in order to gain greater policy flexibility. Bessent endorsed this strategy, describing a more agile and less predictable Fed as one that can better avoid policy mistakes.
📊The Treasury Secretary struck an optimistic note on the broader economic outlook, projecting GDP growth of around 3 percent in 2026, a pace reminiscent of the 1990s, driven by productivity gains and technological advances. He attributed current inflation to temporary supply-side factors rather than excess demand, and expressed confidence that the Fed can manage price pressures without stifling growth.
📌Bessent also reiterated his “3-3-3” economic plan: 3 percent GDP growth, reducing the federal deficit to 3 percent of GDP, and increasing energy production by 3 million barrels a day. His remarks come at a particularly relevant time for markets and policymakers alike.
💡Micron’s strong performance has boosted the stock markets, but the key question is, Has it enough to outweigh the concerns about the Fed? Positive earnings also boost morale in the technological sector about the AI businesses.
📈Micron’s revenue more than quadrupled in the fiscal third quarter to $41.46 billion, far exceeding analyst estimates of $35.84 billion. Adjusted earnings per share reached $25.11, well above the $20.78 forecast. The stock rose 15 percent in extended trading.
💠The company attributed the explosive growth to soaring demand for memory chips tied to the artificial intelligence boom. Memory prices have skyrocketed as AI chips consume all available production capacity, and data center demand continues to rise.
🤝The company has signed 16 long-term strategic customer agreements spanning data center, consumer, and automotive markets, totaling $22 billion in commitments. The core data center business saw revenue climb more than sevenfold to $11.5 billion, while cloud memory revenue rose over 300 percent.
💥But that’s not all in the semiconductor industry, SK Hynix filed for a massive $29.4 billion Nasdaq ADR listing, which would be the second-largest U.S. listing on record after SpaceX. Both SK Hynix and Samsung surged, taking South Korea’s KOSPI up about 5 percent.
🧠Qualcomm signaled at its investor day that its new AI chips were designed to use cheaper memory, indicating a potential limit on how much pricing power premium memory makers can retain over time.
🤖Anthropic announced on Friday that it has disabled access to its Fable 5 and Mythos 5 AI models to comply with a U.S. government order regarding national security.
📜The order requires the suspension of access for all foreign nationals, including Anthropic employees. The models, recently launched and praised for their advanced capabilities, will only be accessible to select companies under a cybersecurity project.
😕Anthropic expressed concern over the lack of transparency in the government’s actions and apologized for the disruption. The company has previously faced issues with the U.S. government, including being labeled a supply chain risk by the Department of Defense.
Now, let’s return to the topic that has worried markets most in recent months, the Middle East.
🛳️Trump claimed that Iran has assured him there will be no tolls, insurance costs, or charges of any kind for ships passing through the Strait of Hormuz. He also stated that no money has been given directly to Iran, and any released frozen assets will be controlled by the U.S. and used to purchase American agricultural products for Iran.
🇮🇷Iran has not commented on Trump’s specific tolls claim. However, Iran and Oman issued a joint statement saying they would start working on an agreement over navigation services in the Strait, including costs associated with them under international standards.
⚖️A major contradiction exists between U.S. and Iranian statements on the use of frozen funds. Trump and Vice President Vance claim the assets will be used exclusively to purchase U.S. crops, directly benefiting American farmers. U.S. could theoretically require foreign banks to route funds only to U.S. banks for agricultural purchases.
❌Iranian officials flatly deny this. A foreign ministry spokesperson said any purchases would be based on price and quality, not terms dictated by Washington, and Iran’s ambassador in Geneva stated that Iran is the only country that decides what to do with those assets.
🪞Iran’s foreign ministry spokesperson noted the irony that the goal of destroying Iranian civilization had become enriching American farmers.
🧾Meanwhile, The White House requested $87.6 billion in supplemental spending from Congress to pay for the Iran war and several other programs, including aid to U.S. farmers and Ebola response efforts.
🏗️The request includes $21 billion for the Defense Department for munitions procurement and strengthening the industrial base, $1.4 billion for Ebola response, and $768 million for the Energy Department. It also includes $10 billion for farmers and $1 billion for the renovation of Penn Station in New York City. Also $672 million for removing Iranian nuclear materials, inspections, and counterproliferation activities, as reported by Fox News.
🗣️Democrats immediately criticized the request. Senator Patty Murray said Trump launched a reckless and costly war without authorization and is now asking taxpayers to pick up the tab while the Pentagon already has a historic annual budget and over $100 billion in unspent funding from the prior year’s tax and spending package.
🏛️House Appropriations Committee Chair Tom Cole and Defense Appropriations Subcommittee Chair Ken Calvert issued a joint statement saying Congress has a constitutional obligation to provide for the common defense and must sustain the military with the tools needed to defend America. Defense Secretary Hegseth said weeks ago that the Pentagon may need up to $200 billion for the war.
🛢️Oil prices fell as Brent and WTI crude lost wartime gains. Investors expect global crude supplies to improve after tankers, stranded in the Persian Gulf since the U.S.-Iran war began, began leaving the Strait of Hormuz.
💵U.S. crude for August delivery dropped 1.34% to about $69.4 a barrel, while Brent declined 1.67% to under $72.51 a barrel.
🧮Since an agreement to reopen the Strait, over 20 oil tankers carrying approximately 35 million barrels of crude have passed through. However, Iran’s Islamic Revolutionary Guard Corps Navy warned that safe passage would only be allowed via designated routes, indicating ongoing risks in the area.
On the eastern front:
🇪🇺The European Union has postponed providing loans to Ukraine for arms, according to a report from Euractiv. The decision stems from concerns that much of the funding could be mismanaged by Ukraine’s central bank.
📝Under the revised plan, the first tranche of the EU’s €90 billion loan package will no longer include €5.9 billion earmarked for defense spending—specifically drone production—and will instead be allocated as €3.2 billion in budget support. Two sources cited by Euractiv attributed the change to a “technical issue” related to the EU’s need to ensure proper oversight of how the funds are spent.
🏠Ukraine has mandated an urgent evacuation of 12 border villages near Belarus due to security concerns, according to official announcements yesterday. The evacuation will start on July 1, 2026, and should be finished in about two months. This decision was made by the Chernihiv Oblast Defense Council at the request of the Ukrainian military.
🚨Regional governor Viacheslav Chaus announced the order, citing increased Belarusian military activity near the border. Recent tensions have been noted, despite the northern front being relatively quiet since spring 2022. Evacuations allow military operations to proceed more freely, reducing civilian risks.
🧨If Ukraine were to go to war with Belarus, it would risk collapse, as, in addition to the territories lost in the east, it would face another open front in the north of the country, much closer to the capital.
Market View.
📉Markets must now choose between riding the wave of enthusiasm from Micron’s results and the unwinding of leverage in the tech sector, or the sell-offs driven by pessimism over a hawkish Federal Reserve. Today’s PCE inflation data release should help clarify the outlook.
⏳S&P 500 futures pulled back during yesterday’s session and are now attempting to reclaim the 7,500-point level, currently trading at 7,488. Nasdaq 100 futures are following a similar pattern, trying to stabilise above 30,000 points, currently at 30,130.
💱The US Dollar Index (DXY) has finally given up some ground after its impressive rally, falling towards 101.50 before stabilising; it is currently trading at 101.60. EUR/USD and GBP/USD appear to be experiencing a pullback on the charts. Does this mean the downtrend in these pairs will continue? EUR/USD is trading around 1.1350, while GBP/USD is around 1.3175.
🌍In Europe, indices are struggling to regain their upward momentum. DAX 40 futures attempted to reclaim 25,000 points but have pulled back to the current 24,930. Euro Stoxx 50 futures approached 6,300 points but have since retreated to 6,265.
🛢️The crude oil market continues to decline, with Brent crude spot prices falling to around $72.60 per barrel.
💰Gold futures have dropped below $4,000 per ounce, falling to the current $3,995—a scenario we anticipated given the dollar’s rise.
₿Bitcoin fell below $60,000, dropping to approximately $59,000 before rebounding to its current $61,675.
