Morning Bid: Is it 'over'?

• U.S. struck Iranian targets after oil tankers were hit by projectiles in the Strait of Hormuz, marking the most significant escalation since last month's ceasefire agreement
• Chip stocks tumbled globally with the SOX index down nearly 5% and South Korea's KOSPI falling over 5% into bear market territory
• New Zealand's central bank raised rates by a quarter-point to 2.5% to combat inflation, signaling continued monetary tightening globally

Market Summary: Military Tensions and Tech Selloff Roil Markets

Key Developments:

U.S.-Iran tensions escalated sharply after military strikes were exchanged, marking the most significant conflict since a ceasefire agreement last month. President Trump declared the memorandum of understanding with Iran was "over" following U.S. strikes on Iranian targets Tuesday, which came after projectiles hit oil tankers in the Strait of Hormuz.

Market Impact:

• Oil prices surged, with Brent crude trading above $78/barrel on Wednesday following Trump's remarks
• Washington reinstated sanctions on Iranian oil effective July 17, further supporting prices
• Chip stocks plunged, with the SOX chip index falling nearly 5% and Nasdaq dropping over 1%
• SpaceX declined 7% on its first day in the Nasdaq 100
• Asian markets fell sharply; South Korea's KOSPI dropped over 5%, entering bear market territory (down more than 20% from late June record)
• U.S. stock futures opened sharply lower Wednesday
• Bond prices rose amid uncertainty

Monetary Policy:

New Zealand's central bank raised rates 25 basis points to 2.5%, signaling further tightening likely to combat inflation. This underscores persistent global inflation pressures, potentially exacerbated by Middle East energy supply disruptions.

Key Events:

• Federal Reserve June policy meeting minutes release scheduled
• U.S. 10-year note auction at 6 p.m. EDT
• NATO summit continues in Ankara

Outlook:

Traders appear to view the military flare-up as temporary volatility rather than sustained conflict, though energy market uncertainty could reignite inflation concerns globally. The combination of geopolitical risk and tech sector weakness presents near-term headwinds for equity markets.