General Market News

A New York Fed survey reveals that more than a year after Trump administration tariffs were implemented, about half of companies are still raising prices to pass costs to consumers, with price increases expected to continue well beyond 2026. Among tariff-paying firms, 31% of service companies and 37% of manufacturers plan price hikes within six months, while additional firms plan increases further out.

• Two-thirds of service firms and nearly all manufacturers import inputs, with 40% of service firms and 70% of manufacturers directly paying tariffs over the past 12 months
• Companies cite two main reasons for delayed price increases: existing contracts that prevent immediate price changes and deliberate gradual pricing strategies to avoid customer shock
• Only 29% of service firms and 18% of manufacturers have fully passed through tariff costs to customers so far, indicating substantial future price pressures remain in the pipeline

The Federal Reserve under new Chair Kevin Warsh kept interest rates unchanged at 3.6% last month, but meeting minutes reveal deep divisions among officials about inflation's future path. While some expect inflation to cool as gas prices fall and tariff effects fade, others worry AI infrastructure investment will keep prices elevated. The split leaves uncertainty about whether rates will rise, fall, or remain stable by year-end.

• Officials are evenly divided on the year-end rate outlook, with 'many' expecting rates to stay at or slightly below 3.6%, while 'many' others predict rates will be higher
• Key inflation concerns include opposing forces: potential cooling from lower gas prices and fading tariff impacts versus upward pressure from massive AI infrastructure investment driving up semiconductor and technology goods prices
• Kevin Warsh replaced Jerome Powell as Fed Chair earlier this year after Trump criticized Powell for not cutting rates quickly enough, though Warsh has shown no signs of rate cuts so far

President Trump declared the U.S.-Iran ceasefire 'over' and stated he may no longer want to pursue a deal with Iran following renewed hostilities in the Strait of Hormuz. Iran launched attacks on vessels in the strategic waterway, prompting the U.S. to reimpose oil sanctions and conduct airstrikes on Iranian military infrastructure. The breakdown threatens a month-old agreement that had temporarily eased tensions in the region.

• Iran attacked vessels in or near the Strait of Hormuz on Tuesday, violating the ceasefire agreement that required Iran to ensure safe passage of commercial vessels through the major oil trade route
• The U.S. responded by reimposing sanctions on Iranian oil sales and launching airstrikes on Iranian military infrastructure and small boats
• Iran's Foreign Ministry accused the U.S. of violating the deal through 'unilateral actions and aggressive attacks,' claiming Iran has sovereignty over transit arrangements in the strait

Federal Reserve officials were divided on the future direction of interest rates at their June 16-17 meeting under new Chairman Kevin Warsh, with some members seeing conditions for cuts and others anticipating hikes. The FOMC unanimously voted to hold rates steady at 3.5%-3.75%, where they have remained throughout 2026. The meeting marked a shift toward less forward guidance, with a significantly shorter post-meeting statement reflecting Warsh's preference for reduced Fed communication.

• Many participants saw rates staying within or slightly below the current 3.5%-3.75% range by year-end, while many others expected rates above that range, showing no clear directional consensus
• The dot-plot of member expectations narrowly tilted toward one rate hike in 2026, followed by one cut in each of the following two years
• The post-meeting statement was reduced to about one-third its typical length, with officials removing prior easing bias language and eliminating boilerplate economic descriptions as part of Warsh's communication overhaul

Equity markets posted strong gains in the first half of 2026 as geopolitical tensions eased, with US small-caps seeing their best H1 since 1991. The Federal Reserve held rates steady at 3.50-3.75% under new Chair Kevin Warsh, adopting more hawkish communication as inflation rose to 4.1% year-over-year, with markets now pricing in potential rate hikes rather than cuts.

• Market leadership broadened significantly: Russell 2000 gained over 22%, Nasdaq-100 rallied 32% from March lows, and S&P 500 rose 18%, while crude oil surged 53.9% as Middle East shipping tensions resolved
• Fed shifted hawkish with nine of eighteen officials now projecting at least one 25 bps hike in 2026, raising the median year-end funds rate forecast to 3.8% from 3.4% in March
• Liquidity headwinds building as Fed's Reserve Management Purchases scaled back 75% to $10 billion monthly from $40 billion in December 2025, potentially signaling softer conditions ahead for momentum stocks and mega-cap tech

War insurers are advising shipping companies to pause voyages through the Strait of Hormuz following attacks on three tankers that escalated tensions between Iran and the U.S. War risk insurance rates for ships in the Gulf have risen from 2% to nearly 3% of vessel value, with some underwriters suggesting rates could reach 5% or higher. The U.N.'s International Maritime Organization recommended avoiding the strait until crew safety can be assured.

• War insurance rates for Gulf vessels increased to 3% of vessel value from 2% within 24 hours, with potential further increases to 5% or more, translating to hundreds of thousands of dollars in additional daily costs
• Tuesday's tanker attacks prompted Washington to revoke an oil licence and launch strikes on Iranian targets, with President Trump indicating new strikes were likely and an end to negotiations with Iran
• The IMO Secretary-General called on governments to engage with insurers to ensure premiums reflect current realities rather than peak crisis levels, citing the strain on shipowners from sustained high costs

Paris-based Mistral AI launched its first robotics model, Robostral Navigate, on Wednesday, marking Europe's leading AI company's entry into industrial automation. The launch follows Mistral's acquisition of Austria's Emmi AI in May and positions the company to compete in factory and warehouse automation markets.

• Robostral Navigate enables robot navigation using only a single camera, eliminating the need for lidar or advanced multi-camera sensor setups
• The system is designed to work with robots from different suppliers, offering cross-platform compatibility
• The model focuses specifically on navigation capabilities rather than object handling or manipulation tasks

Latin American assets declined on July 8 as U.S. President Trump declared the Iran interim accord 'over' and threatened further military strikes, sending oil prices up 5% to a two-week high and dampening global risk sentiment. The MSCI LatAm stocks index fell 1.4% and currencies dropped 0.5%, while the IMF lowered its 2026 global economic growth forecast to 3.0% amid ongoing geopolitical risks.

• Oil prices surged 5% after Trump revoked Iran's oil export license and announced likely additional strikes, reigniting inflation concerns particularly for oil-importing economies like Kenya and Sri Lanka
• Brazilian oil giant Petrobras gained 3% and Colombia's Ecopetrol rose 4.7% on higher oil prices, partially cushioning broader market losses in the region
• Chile's peso fell 0.8% to its lowest level since March 27, leading regional currency declines alongside copper price weakness, while Mexico's peso dropped 0.6%

Used electric vehicle prices surged 12% in June 2026 compared to June 2025, driven by heightened demand amid the Iran war and elevated U.S. gas prices, according to Cox Automotive. This contrasts sharply with used non-EV prices, which increased only 1.7% over the same period, and new EV sales, which declined sharply in Q2 2026.

• The Manheim Used Vehicle Value Index shows wholesale EV prices have risen every month in 2026, reaching an average of $30,400 (up 11.5% year-to-date), while non-EV prices averaged $19,125 (up less than 1%)
• U.S. gas prices are up roughly 21% year-over-year to a national average of $3.80 per gallon, fueling consumer shift toward used EVs with retail units sold up 24.7% year-over-year in May
• An influx of off-lease EVs expected later in 2026 could pressure prices downward, though sustained high gas prices may maintain demand; Tesla models led used EV sales with 15,353 units sold in May

WTI crude oil prices gapped higher on Wednesday following renewed US military attacks on Iran, escalating Middle East tensions. Both WTI and Brent crude rallied sharply, with Brent up 4.24% and WTI gaining 3.38%, though analysts suggest the spike may be short-lived as markets approach resistance at their 200-day moving averages.

• Brent crude faces technical resistance at the $83 level (200-day EMA), while WTI encounters similar overhead resistance at its 200-day moving average
• Analysts view the price spike as potentially a 'fade-the-rally' opportunity, expecting the surge to be short-lived despite geopolitical tensions
• The analyst suggests this may represent a 'negotiation tactic' and believes oil will struggle to spike dramatically as it has in the past, with a summer trading range likely to establish

US stocks fell sharply Wednesday after President Trump declared an interim Iran agreement 'over,' triggering a risk-off selloff. The Dow dropped 509 points (0.96%), while oil prices surged over 5% on renewed Middle East tensions. Energy stocks gained while travel and technology sectors declined as investors reassessed geopolitical risks and inflation concerns.

• Brent crude rose more than 5% to around $78/barrel and WTI climbed 5% to nearly $74/barrel following Trump's remarks at the NATO summit in Ankara, reviving supply disruption fears.
• Energy stocks rallied with Chevron and Exxon Mobil up over 1% and ConocoPhillips gaining 1.7%, while travel stocks slumped with United Airlines down 3.1% on higher fuel cost concerns.
• Investors await Fed June meeting minutes for rate outlook clues, with markets pricing in at least one interest rate increase before end of 2026 according to CME's FedWatch Tool.

The U.S. trade deficit surged to $77.6 billion in May 2026, up from $54 billion in April, marking the second-worst monthly figure since 1992. The widening gap occurred despite Trump-era tariffs designed to reduce imports, as exports fell 3% while imports rose 3% simultaneously. The spike raises questions about tariff effectiveness, though energy price spikes and AI-related supply chain front-loading may have been temporary factors.

• May's deficit was driven by WTI crude spiking to $112.25 and companies front-loading AI chips and servers ahead of anticipated tariff disruptions
• Tariffs have generated over $29 billion in monthly revenue but failed to curb import volumes in May, with costs largely absorbed by retailers rather than consumers
• June 2026 data will be decisive: with oil retreating to $70 and gas to $3.78, a return to mid-$50 billion deficits would suggest May was anomalous, while sustained deficits above $70 billion would indicate tariff policy failure

U.S. stock futures dropped sharply on Wednesday as escalating military strikes between the U.S. and Iran threatened to end a fragile ceasefire, sending oil prices surging 5% to $74 per barrel. President Trump indicated the ceasefire could be 'over' after attacks in the Strait of Hormuz prompted retaliatory strikes. The market turmoil comes as chip stocks extended losses for a second day and investors awaited Fed meeting minutes.

• S&P 500 futures fell 0.7% while Nasdaq futures dropped 1.1% as WTI crude oil jumped 5% to $74 per barrel and the 10-year Treasury yield rose to 4.57%, its highest level in over a month
• Chip stocks including Nvidia, Intel, and AMD are set to extend yesterday's sell-off after Samsung's quarterly results failed to impress investors, with the semiconductor ETF down 2% premarket
• Apple announced a multi-year deal to purchase at least $30 billion in chips from Broadcom, part of its strategy to diversify suppliers and reduce reliance on Taiwan amid China tensions

Traders on prediction market platform Kalshi now see only a 44% chance that traffic in the Strait of Hormuz will return to normal by December 1, 2026, after President Trump declared the Iran ceasefire 'over' following new attacks. The outlook has deteriorated sharply, with odds of normal traffic by October 1 falling from over 50% just days earlier on July 4.

• Normal traffic is defined as a 7-day moving average of transit calls above 60, verified by IMF PortWatch data. Traders see the earliest likely return to normal as January 1, 2027 (53% odds).
• Polymarket traders are slightly more optimistic at 59% odds for normalization by December 31, 2026, using the same verification metrics.
• Piper Sandler analysts warn that global oil supply is 'way short' with the strait 'back in play' and any hope of reduced war risk insurance assessments has been eliminated.

Jeff Bezos' space company Blue Origin is conducting its first-ever external fundraising round, with the company being valued at $130 billion. This marks a significant milestone as the rocket company transitions from being solely funded by Bezos to accepting outside investment.

• Blue Origin has been privately funded by Bezos since its founding and is now opening up to external investors for the first time
• The $130 billion valuation positions Blue Origin as one of the most valuable private space companies globally
• This fundraising round signals Blue Origin's need for additional capital beyond Bezos' personal funding to scale operations and compete in the commercial space industry

US stock futures fell sharply on Wednesday after President Trump declared the Iran ceasefire 'over' following an exchange of military strikes. The escalation caused oil prices to spike over 5%, raising inflation concerns and prompting traders to price in potential Fed rate hikes rather than cuts. Treasury yields rose as markets reassessed monetary policy expectations amid renewed geopolitical tensions.

• Dow futures down 1.1%, S&P 500 futures off 0.9%, and Nasdaq futures down 1.3% following US strikes on 80+ Iranian targets and revocation of Iran's oil export waiver
• West Texas Intermediate crude jumped 5.4% to $74.26 per barrel from $67 last week, fueling inflation fears across markets
• Traders now see over 85% probability of at least one 25-basis point Fed rate hike before year-end, a reversal from previous rate cut expectations

Blue Origin, Jeff Bezos' space company, is raising $10 billion in its first-ever outside funding round at a pre-money valuation of $130 billion, according to the New York Times DealBook. This marks a significant shift for the rocket maker, which has been privately funded by Bezos since its founding.

• The $10 billion capital raise values Blue Origin at $130 billion pre-money, making it one of the most valuable private space companies
• This is the first time Blue Origin has sought external funding since its inception, having previously relied solely on Bezos' personal investment
• The funding round signals Blue Origin's expansion plans and increased capital needs as it competes in the commercial space industry

The Russell 2000 Index gained over 20% in the first half of 2026, its best first-half return since 1991, outperforming the S&P 500's 9.6% gain. Historical analysis shows that when small caps lead in the first half, both indexes typically experience weak third quarters but recover with solid second-half returns. Data also indicates the biggest first-half winners and losers tend to outperform mid-range stocks in the second half.

• The Russell 2000 has gained 20%+ in the first half only five times since 1980; historically, this pattern led to average third-quarter losses of 2.5% for small caps and 1.5% for the S&P 500, but rebounds produced strong fourth quarters
• When small caps outperform large caps in the first half, the S&P 500 averaged 6.45% second-half returns with 70% positive outcomes, while the Russell 2000 averaged 3.3% gains
• Analysis of the top 25 and bottom 25 S&P 500 first-half performers over 10 years shows they returned 19% and 12% respectively in the second half, significantly outperforming the 8% average of mid-range stocks

Federal Reserve officials signaled one interest rate hike in 2026 to combat persistent inflation, but historical patterns suggest the central bank rarely makes single rate moves and typically adjusts policy in cycles. Minutes from the Fed's June meeting under new Chairman Kevin Warsh, characterized as a 'family fight', will be released Wednesday to provide more insight into the divided committee's policy direction.

• The Fed has rarely implemented just one rate move since 1990; the last single adjustment was in 2015, with the central bank typically moving in aggressive cycles to achieve policy goals
• Inflation remains above the Fed's 2% target for five years running, with consumer expectations at multi-year highs (3.7% one-year outlook, highest since September 2023)
• Bank of America forecasts three quarter-point hikes by year-end 2026, while markets price in a September hike followed by an extended hold, though former St. Louis Fed President Bullard warns waiting past November elections could require more aggressive action

A Wood Mackenzie report warns that the record expansion of global LNG supply, led by the U.S. and Qatar, faces potential disruption due to heavy reliance on South Korean and Chinese shipyards for LNG carrier construction. Over 260 LNG carriers are on order for delivery from 2027 onwards, with approximately two-thirds being built in South Korea and most of the remainder in China. This concentration of shipbuilding capacity creates risks of delays and cost increases that could slow LNG industry growth.

• South Korea and China control the vast majority of LNG carrier construction due to decades of technological investment and expertise, creating a critical supply chain dependency the LNG industry cannot quickly replicate.
• The report identifies an 'hourglass' system where global LNG supply and demand increasingly depend on a narrow transport link formed by carriers built in just two countries.
• Building alternative shipbuilding centers would require years of investment and tens of billions of dollars, making diversification of this critical infrastructure highly challenging in the near term.