July 8th Market Overview

Happy Wednesday

The ceasefire with Iran fell apart and oil moved back toward $80. Trump told the NATO summit "I think it's over" after US forces struck more than 80 targets inside Iran overnight. The bigger story imho is the Fed, where rate hike odds keep climbing. I think a hike will move money more then another ceasefire breaking.

Let’s dig in...

Today's Big Picture

1. Oil Climbs as the Ceasefire Crumbles

President Trump called the Iran truce over after Tehran attacked three commercial ships in the Strait of Hormuz. The US hit more than 80 targets overnight and Trump says more strikes are coming tonight. Crude pushed near $80 a barrel. Worth noting: tanker traffic through Hormuz is still running at a normal 40 crossings a day, so shippers aren't panicking yet.

2. Fed Minutes Reveal a Family Fight

Kevin Warsh ran his first meeting as Fed chair last month and the minutes show a genuinely split room. Many officials see rates at or below current levels by year end. Many others see them higher. The dot plot narrowly tilts toward one hike this year, and traders moved their bets further toward an October hike after today's oil spike.

3. Tech Rotation Hits the Kospi

South Korea's benchmark index dropped into a bear market today. Samsung and SK Hynix make up roughly half the index, so when chip sentiment turns, the whole market goes with it. Investors moved money into cheaper AI names like Alibaba $BABA, which had its best day in months.

Market Overview

Index Performance

Stock Spotlight

SpaceX $SPCX ( ▼ 2.75% )  
dipped below its $150 IPO price before stabilizing this morning. Analyst targets average $236, so Wall Street and investors are seeing two different companies right now.

Broadcom $AVGO ( ▲ 5.13% )  
landed a commitment from Apple worth more than $30 billion for US-made chips. Real orders, not an AI promise.

Nvidia $NVDA ( ▲ 3.78% )  
is trading at its cheapest forward valuation since 2019 despite record revenue. The stock rose today while the market fell. The multiple is shrinking while the business keeps growing.

Big Name Updates

Chevron $CVX ( ▲ 1.04% )  
advanced with crude, and energy stocks broadly caught a bid on the Middle East news.

Rivian $RIVN ( ▲ 1.27% )  
stabilized after yesterday's heavy drop on plans to sell more stock.

Levi Strauss $LEVI ( ▼ 1.01% )  
reports after the close. A clean read on how consumers are spending on clothing.

Other Notable Company News

American Airlines $AAL ( ▼ 3.49% )  
led travel stocks lower as jet fuel costs climb back.

Banco Santander $SAN ( ▼ 4.41% )  
fell after Trump threatened to cut off trade with Spain.

GE Vernova $GEV ( ▲ 0.62% )  
got a boost from a Bank of America note projecting a 100 gigawatt US power shortfall through 2030.

Blue Origin
raising about $10 billion at a $130 billion valuation, its first outside money ever.

Costco $COST ( ▲ 0.72% )  
reports June sales later today.

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The ones supplying the chips, the cloud capacity, and the data tools everything else runs on.

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Sector Watch

Bond Market

The 10-year yield hit its highest level since May and the 30-year crossed back above 5. Investors are pricing in the inflation risk of higher energy costs, and yields rose across Europe and Asia too. Tomorrow: a $22 billion 30-year auction, worth watching with yields at these levels.

Policy Watch

Fed

Warsh cut the post-meeting statement to a third of its usual length, and most officials liked the shorter version. He also dropped the old language that leaned toward easing. Less forward guidance means fewer hints for markets and more surprises on Fed days.

Iran

The ceasefire breakdown triggered fast policy moves overnight:

• Treasury revoked the license that let Iran export oil globally.

• The military struck more than 80 targets inside Iran.

• Trump floated reinstating the naval blockade on the Strait of Hormuz and taking Kharg Island, the port handling most of Iran's oil exports.

Trade & Energy

Trump said he wants to cut off all trade with Spain after Madrid closed its airspace to US planes. Spain's response: EU trade runs through Brussels, so this is easier said than done.

Russia banned diesel exports through July 31 after Ukrainian drone strikes crippled its refineries. Russia supplied about a tenth of the world's seaborne diesel last year, and New York diesel futures moved hard on the news.

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

Tonight's Threatened Strikes

Trump says the US will hit Iran again tonight. If Iran answers by targeting more ships, oil has room to run. If Hormuz traffic stays normal, markets may shrug.

SK Hynix US Debut

The chipmaker starts trading on the Nasdaq Friday, two days after its home market entered a bear. The reception will tell us where AI appetite really stands.

Weekly Jobless Claims

Tomorrow morning. Another real-time read on the labor market, plus Fed speakers Williams and Logan later in the day, the first Fed voices since the minutes.

- John

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