General Market News

The European Commission defended the EU's digital tax policies on June 26 in response to criticism from U.S. President Donald Trump. The EU asserted its sovereign right to regulate economic activity and emphasized that its digital taxes are non-discriminatory, applying equally to all large companies regardless of origin. The bloc warned it would respond swiftly to unjustified U.S. measures while remaining open to a global solution.

• EU spokesperson stated that digital taxes are 'non-discriminatory by design' and apply equally to all large companies, regardless of their country of origin
• The European Commission warned it would respond swiftly to any unjustified unilateral measures from the U.S.
• Despite tensions, the EU indicated openness to a global solution aligned with G7 agreements on international taxation

Oil prices plunged 3.5% on June 26, 2026, as markets dismissed geopolitical concerns following Iran's drone attack on a vessel in the Strait of Hormuz. WTI crude fell below $69 and Brent tested $72 support levels as traders bet the incident won't disrupt shipping or escalate Middle East tensions, with U.S.-Iran talks scheduled for June 28-29.

• Iran fired four drones at ships in Hormuz Strait, with one hitting a vessel that allegedly used an unauthorized route, but the U.S. has not responded beyond Trump's social media comments
• WTI oil broke below $70.50-$71.50 support and is targeting $66.50-$67.00, while Brent oil tested $72.00-$72.50 support with potential downside to $67.00-$67.50
• Natural gas continues attempting to break above $3.25-$3.30 resistance as traders roll contracts from July to August 2026

Iraq's Oil Ministry announced that OPEC has begun gradually restoring Iraq's pre-war production allocations and confirmed it is not planning to leave the organization. The statement came after reports suggested Iraq was considering exiting OPEC if not allowed to significantly increase oil production, following the UAE's departure two months earlier. Iraq's oil exports have been severely disrupted by the Iran war blocking the Strait of Hormuz.

• Iraq is OPEC's second-largest producer with a July quota of 4.378 million barrels per day, though current output is significantly below this due to Strait of Hormuz disruptions
• Iraq seeks a reassessment of OPEC production quotas to better reflect its economic and security circumstances after war-related export disruptions
• The potential exit would have dealt a serious blow to OPEC, which recently lost the United Arab Emirates as a member less than two months ago

U.S. stock markets ended the week with mixed performance as technology sector volatility dragged down the Nasdaq toward its worst weekly decline since June 5, 2026. The tech selloff persisted despite positive earnings from Micron, while the Dow Jones was the only major index headed for a weekly gain. Market concerns intensified after reports of potential IPO delays due to rising AI infrastructure costs.

• The Nasdaq is on track for its worst weekly performance in three weeks, pulled down by sustained tech sector selling pressure that overshadowed upbeat earnings reports
• Wendy's (WEN) emerged as a meme stock favorite as retail traders rotated away from high-beta chip stocks into alternative sectors like Caterpillar (CAT)
• Notable tech developments included IBM and Arm Holdings receiving partnership benefits, while Qualcomm faced sector rotation headwinds and Western Digital gained from Micron's positive report

New Federal Reserve Chair Kevin Warsh held his first FOMC meeting, keeping rates unchanged at 3.50-3.75% but adopting a more hawkish stance with nine members now projecting at least one rate hike by year-end 2026, up from zero in March. Warsh declared 'inflation is a choice' and committed to meeting the Fed's 2% inflation target after the PCE index has exceeded that level for five years. Markets responded by selling off stocks and bonds while pricing in a 38% probability of a July rate hike.

• The updated Fed Dot Plot showed nine of 18 FOMC members now project at least one rate hike by year-end 2026, a sharp reversal from the two rate cuts markets had priced in at the start of the year
• Fed Chair Warsh emphasized that 'inflation is a choice' and acknowledged the Fed's failure to meet its price stability mandate, with PCE inflation running above the 2% target for five consecutive years
• Global equity markets posted strong gains on potential U.S.-Iran peace deal news, with emerging markets up nearly 8% for the week, though oil remains 33% above pre-conflict levels at $77 per barrel

New Federal Reserve Chair Kevin Warsh signaled a hawkish shift in monetary policy at his first press conference, prioritizing inflation control and promising 'fresh thinking' at the central bank. Although rates were held steady, markets anticipate rate hikes this year, driving the 2-year Treasury yield up 17 basis points to 4.22%, its highest level since February 2025.

• The 2-year Treasury yield jumped approximately 17 basis points to 4.22% following Warsh's hawkish comments, while the 30-year Treasury yield remained flat, suggesting markets view inflation as a near-term challenge unlikely to persist long-term
• Warsh announced five new task forces to examine Fed communication policy, balance sheet policy, data usage, productivity and jobs, and the inflation framework as part of his reform agenda
• The flattening yield curve suggests investors believe the Fed's credible inflation-fighting stance may increase recession probability, though rate hikes may be delayed if upcoming inflation data remains tame

Nicholas Rossi, a US rapist who faked his death in 2020 and fled to Scotland to avoid charges, has died in a Utah hospital at age 38. Rossi was serving a sentence of 10 years to life for raping two women in Utah in 2008. He died from complications of an existing medical condition after discontinuing treatment.

• Rossi faked his death in February 2020 through an online obituary claiming he died of non-Hodgkin lymphoma, shortly after being charged with rape
• He was arrested in Scotland in 2021 after hospital staff treating him for COVID recognized his distinctive tattoos, including a university crest he never attended
• After a lengthy extradition battle, Rossi was convicted in August following a trial and had used at least a dozen aliases to evade capture over the years

Switzerland's pharmaceutical industry faces potential U.S. trade investigation under Section 301, similar to the probe launched against Germany last week. The risk stems from Switzerland's proposed healthcare reforms aimed at reducing mandatory drug prices, which U.S. lawmakers argue unfairly shifts pharmaceutical innovation costs to American consumers.

• The U.S. initiated a Section 301 investigation against Germany after it announced plans in April to overhaul its healthcare system and lower pharmaceutical spending
• Republican congressmen sent a letter urging investigations into Switzerland and Germany, accusing them of 'free-riding' off U.S. pharmaceutical innovation through pricing controls
• Pharmaceutical and chemical products comprised over half of Switzerland's exports last year, with major drugmakers Roche and Novartis headquartered there

President Donald Trump threatened to impose a 100% tariff on goods from any country that implements a digital services tax on American companies. Trump stated via Truth Social that this tariff would override existing trade deals, whether implemented, signed, or pending.

• The proposed 100% tariff would apply to all goods from countries imposing digital services taxes on U.S. firms
• Trump declared the tariff would supersede all trade agreements with affected countries regardless of their status
• The threat targets foreign governments that tax American tech and digital companies operating in their jurisdictions

U.S. President Donald Trump threatened on Friday to impose a 100% tariff on all goods from any country that implements a digital services tax on American companies. Trump announced via social media that these tariffs would override existing trade agreements with the United States. The move represents an aggressive stance against foreign taxation of U.S. tech firms.

• The threatened 100% tariff would apply to all goods from countries imposing digital services taxes on U.S. companies
• Trump stated the new tariff policy would supersede any existing trade deals with the United States
• The announcement was made through a social media post on June 26, 2026

Economist Steve Moore predicts inflation will soon become 'yesterday's story,' citing a sharp drop in the five-year break-even inflation rate from over 3.5% to 1.92% in recent weeks. This market-based measure suggests bond investors already expect inflation to return near the Fed's 2% target, despite headline PCE currently sitting at 4.07% due to a 24% spike in energy prices. Moore believes the Fed will not raise rates as the energy shock fades and underlying inflation remains controlled.

• The five-year break-even inflation rate collapsed from 3.5% to 1.92% as of June 25, 2026, signaling the bond market expects inflation to average around 2% over the next five years
• Headline PCE inflation reached 4.07% year-over-year in May, driven almost entirely by a 24.26% surge in energy costs, while core PCE sits at 3.41% and food inflation has slowed to 2.38%
• The two-year Treasury yield at 4.09% suggests markets still expect the Fed to maintain patience on rate policy, though Moore predicts no rate hikes if energy moderates and inflation converges toward break-even levels

Russia's central bank stated no additional measures are needed to stabilize the banking system despite a 17.5% year-on-year surge in cash withdrawals. Russians have been pulling cash amid fears that intermittent internet shutdowns, imposed to disrupt Ukrainian drones, could disable payment systems. The liquidity deficit reached 2 trillion roubles in June, though the central bank insists it is providing adequate support to banks.

• Cash held outside banks rose 17.5% year-on-year to over 19 trillion roubles ($243 billion), driven by internet shutdowns and tax increases encouraging businesses to use cash to avoid taxes
• The banking system's liquidity deficit reached 2 trillion roubles in June and could grow to 3.6 trillion roubles by year-end, putting pressure on banks that rely on deposits for funding
• The surge in cash demand is reversing years of digital payment development, with demand at recent central bank repo auctions exceeding supply by more than one-third

President Trump accused Iran of violating a ceasefire agreement through attacks on a cargo ship and drone strikes. The announcement was made during a White House event with American farmers on June 25, 2026. This represents a breaking development in U.S.-Iran relations.

• Trump made the accusation during a dinner with American farmers at the White House Rose Garden
• The alleged violations involve both a cargo ship strike and separate drone attacks by Iran
• The situation is developing and marks a potential escalation in tensions between the U.S. and Iran

Minneapolis Federal Reserve President Neel Kashkari announced Thursday that he has revised his monetary policy outlook and now anticipates one interest rate increase will be needed this year. This represents a change from his previous position on rate policy.

• Kashkari shifted his stance to expect one rate hike in the current year
• The announcement was made Thursday and represents a notable change in his monetary policy outlook
• This is breaking news with limited details currently available

ASE Technology Holding is benefiting from surging AI infrastructure demand, with its assembly, testing, and advanced packaging businesses showing strong growth. The company reported record first-quarter ATM revenues of NT$112.4 billion, up 30% year-over-year, driven by AI accelerator and high-bandwidth memory demand. ASE has increased its 2026 capital expenditure plans and raised LEAP revenue guidance to over $3.5 billion.

• ATM business revenues hit a record NT$112.4 billion in Q1 2026, rising 30% year-over-year due to higher factory utilization and advanced packaging product mix
• Company raised 2026 capex and increased LEAP revenue forecast to exceed $3.5 billion, approximately 10% above prior guidance, with stronger growth expected in 2027
• Stock has surged 159.9% year-to-date and trades at a forward P/E of 42.28, above industry average, with a Zacks Rank #1 (Strong Buy) rating

Jeremy Grantham, co-founder of GMO ($85 billion AUM), warned that U.S. stocks could plunge 70% peak-to-trough, calling this the most expensive market in American history. He claims the market's P/E ratio has averaged over 60% higher from 2010 to today compared to the prior 100 years, and all 26 prior bubbles reaching his 'two-sigma' threshold have reversed to trend without exception.

• Grantham's timing window for the potential decline is extremely wide, ranging from roughly 2 weeks to 2 years, making it uncertain when any correction might occur
• The comparison to the 2000 dot-com bubble is central to his thesis; he previously called a 70-75% decline and the Nasdaq ultimately fell 82%
• Despite the bearish market call, Grantham acknowledges AI is genuinely transformative but argues universal recognition has produced dangerous overinvestment, similar to railroads and the internet which were revolutionary yet destroyed early investors

Cargo drone startup Elroy Air will go public via a SPAC merger with Columbus Circle Capital Corp II in a deal valued at approximately $1 billion. The transaction is expected to generate at least $165 million from committed investors and up to $230 million from the SPAC's trust account. The deal is anticipated to close in late 2026, with Elroy Air trading on Nasdaq under the ticker 'ELRY'.

• Elroy Air develops autonomous heavy-cargo drones for defense, rapid response, and commercial logistics applications
• Proceeds will fund technology and platform development, strategic M&A, and hiring in software and hybrid-electric systems
• The company will list on Nasdaq under ticker symbol 'ELRY' upon deal closure expected in late 2026

Canadian Prime Minister Mark Carney announced that Luxembourg will serve as the European headquarters for a new Defence, Security and Resilience Bank, with its main headquarters in Canada. The bank aims to raise $135 billion to fund defense projects, particularly targeting countries with limited access to affordable financing and small to medium-sized defense firms facing surging demand since the Ukraine war.

• The bank is being championed by Canada and will have its primary headquarters in Canada with Luxembourg as the European base
• The initiative seeks to raise $135 billion to fund defense projects and help smaller defense contractors meet increased weapons demand following the Ukraine war
• More clarity on participating countries is expected after the NATO meeting in Ankara next month, with Carney noting a 'critical mass of countries' intend to join

Bitcoin fell to $58,000 this week before recovering, facing pressure from a risk-off equity rotation and hawkish Fed signals. The crypto market saw $1.4 billion in outflows, though whale selling has cooled from October levels. Advisors should monitor inflation trends and rates as key variables for near-term crypto performance.

• Two macro headwinds: equity-led risk-off rotation (Morningstar AI Index down 6.1% over two days) and core PCE at 3.4% with above-expected consumer spending reinforcing hawkish Fed stance under new Chair Kevin Warsh
• Strategy's Bitcoin holdings (roughly 4% of total supply) face stress with STRC token dropping to 75 from par at 100, though not deemed a systemic risk; global digital-asset products recorded $1.4B in net outflows this week
• Whale selling has cooled significantly per four-year cycle patterns, but this cohort historically does not return as buyers until the next halving in 2028; elevated oil prices from Iran situation likely to keep CPI high near-term

Global civil unrest reached a six-year high in Q2 2026, driven by energy price hikes and rising living costs across emerging markets, according to Verisk Maplecroft. While oil prices have declined following a U.S.-Iran truce, analysts warn that the damage to household finances has already occurred and inflationary pressures will persist into H2 2026. Governments face difficult choices between passing costs to citizens and risking unrest, or absorbing costs and weakening fiscal positions.

• Iraq saw the sharpest proportional rise in protest activity among emerging markets over the past year, followed by Turkey, while India (already highest-risk) experienced marked increases in demonstrations since Q2 2025.
• Countries with weaker fiscal positions face a dilemma between subsidizing energy costs and slowing fiscal consolidation, with Moody's warning that negative rating risks depend on whether government responses damage fiscal trajectories.
• Verisk Maplecroft flags India, Mexico, Brazil, Argentina, Colombia and Turkey as most at-risk going forward, while bond investors may tolerate only temporary and targeted fiscal measures rather than broad subsidies.