General Market News

Saudi Arabia has significantly increased oil shipments through the Strait of Hormuz following a U.S.-Iran agreement signed June 17 to reopen the strategic sea lane. The kingdom shipped 34 million barrels through the strait in two weeks after the deal, more than double the 15 million barrels shipped during the prior three-month conflict period. The Saudis are clearing a backlog of tankers and restarting Gulf export operations after pausing shipments in March due to Iranian attacks.

• Saudi Arabia paused shipments from Gulf terminals Ras Tanura and Juaymah on March 9 and redirected exports through an East-West pipeline to Red Sea terminal Yanbu during the conflict
• About 24 million of the 34 million barrels shipped since June 17 were loaded before or during the war, indicating Saudi Arabia is clearing a backlog with approximately 17 million barrels of pre-war oil still remaining in the Gulf
• Eleven supertankers entered the Gulf between June 23 and July 1, with eight already loaded and five having exited Hormuz, showing the kingdom is actively restarting export logistics beyond just clearing backlogs

The Dow Jones Industrial Average hit a record high on Thursday, rising 1.10% to close at 52,865.24, after a weaker-than-expected June jobs report eased concerns about near-term Federal Reserve rate hikes. The S&P 500 and Nasdaq fell slightly as a sharp selloff in semiconductor stocks offset broader market gains. Markets ended the holiday-shortened week with solid gains across all major indexes.

• June nonfarm payrolls came in well below expectations, with unemployment at 4.2%, causing the probability of a September Fed rate hike to fall from 64.1% to 55%.
• The VanEck Semiconductor ETF plunged 5.2%, led by double-digit declines in Teradyne (down 13%), KLA (down 13%), Nvidia, and Micron as investors rotated out of chip stocks.
• For the week, the Dow gained over 1.7%, the S&P 500 rose more than 1.8%, and the Nasdaq advanced over 2.4%, marking the Dow's fourth consecutive weekly gain.

University of Texas at Austin researchers have created a comprehensive database analyzing the U.S.'s nearly 400 underground natural gas storage facilities, which collectively hold 9.2 trillion cubic feet. The database combines geological, engineering, and operational data to help optimize existing facilities and guide expansion of natural gas storage, while also supporting development of hydrogen and carbon storage industries.

• The database ranks storage facilities by performance metrics to identify promising locations for expansion, addressing growing demand as the U.S. consumes approximately 92 billion cubic feet of natural gas daily
• The system includes three storage types: depleted oil and gas reservoirs, saline aquifers, and engineered salt caverns, representing the world's largest underground natural gas storage network
• The research could enable replacing 'cushion gas' (half of stored natural gas used to maintain pressure) with CO2, freeing up more natural gas for use while permanently trapping greenhouse gases underground

A Delaware judge ruled that JPMorgan Chase must continue paying legal bills for Charlie Javice and Olivier Amar, former executives convicted of defrauding the bank in connection with JPMorgan's $175 million acquisition of education startup Frank in 2021. The judge found JPMorgan failed to prove the legal expenses were unreasonably incurred in bad faith, despite the bank describing the costs as 'astronomical.'

• Javice was convicted in March 2025 and sentenced to 85 months in prison for fraud; she is currently appealing her conviction and sentence
• The ruling covers $10.1 million in legal costs for Javice and $11.3 million for co-defendant Amar (sentenced to 68 months) between January and September 2025
• JPMorgan has been required to pay the defendants' legal bills since June 2023 under a previous court order, and failed to meet the 'challenging burden' to stop payment

The U.S. Treasury announced that 'Trump accounts' for newborns will accept stock donations when they formally launch July 5, 2026, marking America's 250th anniversary. The government will contribute $1,000 seed money for each child born between 2025-2028, with donors able to transfer publicly traded stocks to the accounts. Over 6 million families have signed up, though only 1.4 million qualify for federal funding, meaning most participants will primarily invest their own money while gaining tax advantages.

• Treasury Secretary Scott Bessent stated the stock donation feature creates 'a practical pathway for large-scale private giving' to support future generations
• Treasury announced five investment funds tracking major Wall Street indexes where account holders can invest; Trump himself holds $7-35.1 million in these same instruments
• Trump accounts offer less favorable tax treatment than other youth savings plans but have fewer usage restrictions, with funds untaxed until age 18 but potentially subject to state taxes

The spread between Nasdaq 100 and S&P 500 implied volatility has widened to levels not seen since 2008, signaling a shift in tech investor sentiment. Unlike earlier in the year when the gap was driven by call-buying optimism, the current widening reflects increased demand for protective put options as AI and semiconductor stocks lose momentum. This suggests growing concern among traders about potential downside in high-flying tech names.

• The spread between 25-delta puts in the Nasdaq 100 versus S&P 500 reached 13.6 points, up from just 3 in mid-March and matching levels last seen during the 2008 financial crisis at 13.3 points
• Semiconductor ETF (SMH) fell 4.5% to below $592, returning to levels first reached in late May after more than a month of sideways trading
• Call-buying appetite has dropped sharply, with one-standard-deviation out-of-the-money Nasdaq calls falling from the 99th percentile in May to the 58th percentile currently

Financial strategists discuss potential implications of a Federal Reserve leadership change from Jay Powell to Kevin Warsh. The analysis focuses on how Warsh's different approach to communication and forward guidance could impact monetary policy predictability. Investors are advised to consider portfolio resilience amid potential shifts in the Fed's stance on inflation, interest rates, and balance sheet management.

• Kevin Warsh's communication style and forward guidance approach may differ significantly from current Chair Jay Powell's methods
• Changes in Fed policy on inflation, interest rates, and balance sheet operations could affect stocks, bonds, and overall market liquidity conditions
• Investors should prepare for potentially less predictable monetary policy by focusing on portfolio resilience strategies

Sandwich chain Jersey Mike's has filed for a U.S. IPO, joining a resurgent market for new listings after second-quarter proceeds surpassed $100 billion. The company, which operates over 3,300 locations across the U.S. and Canada, was acquired by Blackstone for around $8 billion in 2023 and could seek to raise more than $1 billion at a valuation of at least $12 billion.

• The IPO market has rebounded following brief volatility from U.S.-Iran tensions, with high-profile listings like SpaceX's record $75 billion IPO driving second-quarter proceeds past $100 billion
• Jersey Mike's operates more than 3,300 fast-casual sub sandwich franchise locations and plans to open 400 stores in the UK and Ireland
• Blackstone acquired Jersey Mike's for approximately $8 billion last year; the company will list on NYSE under ticker symbol 'JMKE' with Morgan Stanley, Jefferies, and J.P. Morgan as lead underwriters

The U.S. labor force participation rate fell to 61.5% in June 2026, the lowest level since March 2021 and the lowest outside the Covid era in 50 years. The decline was driven by 720,000 workers exiting the labor force, with the June unemployment rate drop to 4.2% masking this exodus rather than reflecting genuine job market improvement.

• The labor force shrank by 720,000 in June alone, while those counted as not in the labor force jumped by 832,000, suggesting workers are giving up their job search rather than finding employment
• Prime-age workers (ages 25-54) saw the biggest participation drop, falling 0.6 percentage points to 83.3%, undermining explanations that attribute the decline solely to retiring Baby Boomers or immigration changes
• Over the past year, the labor force is down by just over 1 million workers, while the number of employed has fallen by 1.06 million, indicating a concerning trend beyond normal monthly volatility

Sandwich chain Jersey Mike's filed for an IPO on the New York Stock Exchange under ticker 'JMKE', reporting cumulative same-store sales growth of 50% from 2020 through 2025. The company achieved net income of $55 million on $724 million in revenue last year, with system sales reaching $4.3 billion across nearly 3,300 locations, making it the second-largest hoagie chain behind Subway.

• Jersey Mike's reported 2025 same-store sales growth of 3% and net income jumped from $5 million in 2024 to $55 million in 2025, with revenue increasing from $653 million to $724 million
• Nearly all of Jersey Mike's 3,300 locations are franchised, with about 2,000 opened in the last decade, generating revenue primarily from royalties and advertising fees
• Blackstone acquired a stake in Jersey Mike's in a deal reportedly valuing the chain at roughly $8 billion, with founder Peter Cancro retaining 'meaningful equity' and a board seat

PJM, the largest U.S. power grid serving 67 million people, is bracing for record demand of 166.2 gigawatts on Thursday due to extreme heat and surging data center consumption. Wholesale power costs have surged 68% to $40 billion in the first five months of the year, with data centers accounting for $3.8 billion of the $16.25 billion increase. The grid operator warns it has no spare capacity beyond next year.

• Data center demand contributed $3.8 billion (23%) of the $16.25 billion year-over-year increase in wholesale power costs across PJM's system
• Power line congestion in northern Virginia, home to the world's largest data center cluster, drove price spikes exceeding $2,000 per megawatt hour this week
• Reserve payments to keep coal and gas plants available nearly doubled to $1.1 billion from $531 million year-over-year, signaling grid strain

Goldman Sachs announced it will provide a one-time $1,000 matching contribution to Trump Accounts for eligible children of employees born between 2025 and 2028. This matches the federal government's $1,000 seed contribution to the accounts. The move makes Goldman Sachs part of a growing number of U.S. companies participating in the public-private investment initiative.

• The $1,000 corporate match applies to employees with children born between 2025-2028 who enroll in Trump Accounts
• CEO David Solomon emphasized that starting early and staying invested long-term is key to building financial security for American families
• Goldman Sachs joins other U.S. companies supporting the Trump Accounts program, which aims to instill savings and investment habits in the next generation

Kuwait's crude oil production surged to 1.65 million barrels per day in June, with peak output reaching 1.9 million bpd in late June, as the OPEC member increases exports following a U.S.-Iran interim peace agreement. This marks a significant recovery from May's production of just 580,000 bpd, though still below pre-war levels of 2.5 million bpd.

• June production of 1.65 million bpd represents nearly a threefold increase from May's 580,000 bpd output
• Production peaked at 1.9 million bpd during the last 10 days of June as Kuwait ramped up Gulf exports
• Current output remains approximately 34% below pre-war production levels of 2.5 million bpd

U.S. factory orders declined 1.3% in May, primarily due to a 51.8% drop in commercial aircraft bookings, though this was better than the forecasted 1.8% decline. Despite the monthly decrease, orders remained 5.1% higher year-over-year, supported by strong demand in AI-related sectors like computers and electronic products, which helped offset impacts from the U.S.-Israeli war with Iran.

• Boeing received only 27 aircraft orders in May compared to 136 in April, driving the sharp decline in commercial aircraft bookings after April's 167.4% surge
• AI spending boom drove gains in key sectors: computer and electronic product orders rose 0.2% monthly and 13.0% year-over-year, while machinery orders surged 2.1%
• Core capital goods orders (excluding aircraft), a key measure of business spending plans, rebounded 1.4% in May, indicating continued business investment despite monthly volatility

U.S. major indices experienced choppy trading on July 2, 2026, following a weaker-than-expected Non-Farm Payroll report. The Dow Jones gained 0.74%, the S&P 500 rose 0.38%, while the Nasdaq 100 declined 0.31%. Markets were set to close Friday for the holiday, limiting immediate follow-through trading.

• The NFP miss triggered initial volatility as markets interpreted weaker jobs data as potentially supporting lower interest rates ahead
• Technical levels remain intact: Nasdaq 100 facing resistance at 30,700 with support at 29,000; Dow targeting 53,000 with a floor at 52,000; S&P 500 eyeing 7,650 after breaking above a consolidation triangle
• Holiday closure on Friday (July 3) expected to keep trading quiet through end of week, with full market activity resuming Monday

Stock market gains created nearly 1 million new millionaires globally in 2025, bringing the total millionaire population to 58 million, according to a UBS report. The United States accounted for over 440,000 of these new millionaires, averaging more than 1,200 per day. Global personal wealth surged 10.8%, the largest increase since 2017, though wealth gains were concentrated among richer households while median wealth declined in most markets.

• The U.S. stock market rose approximately 18% in 2025, with wealthier individuals benefiting disproportionately due to greater exposure to financial markets
• U.S. median wealth per adult declined nearly 20% from 2020 to 2025, while average wealth increased about 10% over the same period, highlighting growing wealth inequality
• The world's 58 million millionaires now control nearly half of global wealth, approximately $250.6 trillion, with over 40% of all millionaires residing in the United States

Investment manager Meb Faber warns that despite long-term optimism about U.S. stock market performance, current high valuations suggest potential for significant near-term declines. While $1 invested in U.S. stocks in 1800 would now be worth over $4 million, Faber notes the market's cyclical nature means a 50% drop by 2030 would be 'totally normal.'

• U.S. stocks currently trade at a CAPE ratio in the low 40s (versus historical average of 18), making them the most expensive globally for the first time, comparable to late 1990s valuations that preceded muted returns
• Foreign and emerging markets trade at significantly lower valuations (low teens to low 20s), with the cheapest bucket of countries returning 55% last year despite being largely abandoned by investors
• Historical precedent exists for dominant markets declining: Japan fell from being one-third of global market cap in the 1980s to just 5% today after three decades of stagnation

U.S. stock markets rose on Thursday after June jobs data came in weaker than expected, with only around 100,000-110,000 jobs added versus forecasts of 115,000. The disappointing employment report reduced market expectations of further Federal Reserve rate hikes this year, pushing Treasury yields lower and lifting equities.

• Probability of at least one Fed rate hike this year dropped to 75.6% from approximately 84% before the jobs report release
• The Dow Jones gained 0.49% (256 points), S&P 500 rose 0.39%, and Nasdaq added 0.24% as investors rotated into defensive sectors
• Global markets showed mixed performance with South Korea's Kospi plunging 7.89% and chip stocks like SK Hynix falling 14.57%, while European markets recovered with the Stoxx 600 rising 0.6%

US employers added 57,000 jobs in June, falling short of the 115,000 estimate and ending a three-month streak of gains above 100,000. The unemployment rate dropped to 4.2% from 4.3%, suggesting labor market stability despite slower hiring. The steady employment picture may strengthen the Federal Reserve's case for raising interest rates rather than cutting them.

• June job gains of 57,000 missed economist estimates of 115,000 new positions
• Unemployment rate improved to 4.2% from 4.3% in the previous month
• April and May payroll figures were revised downward by a combined 74,000 jobs

US employers added only 57,000 jobs in June 2026, roughly half of economists' predictions, while the unemployment rate edged down to 4.2%. The Bureau of Labor Statistics also revised prior months downward by 74,000 jobs total, signaling slower job growth amid economic uncertainty driven by Middle East conflict and elevated inflation.

• May job figures were revised down from 172,000 to 129,000, and April figures from 179,000 to 148,000, showing weaker momentum than initially reported
• Healthcare added only 22,000 jobs versus its 38,000 monthly average, while hospitality/leisure unexpectedly declined by 61,000 despite World Cup matches being hosted in the US
• The weak jobs report makes it more likely the Federal Reserve will maintain its inflation focus at its late July meeting, with most Fed officials projecting at least one rate hike before year-end as inflation reached 4.2% in May