Good morning and welcome to today's market chronicle. It's Tuesday, June 23rd. The war is over, oil is cheap, peace is breaking out everywhere, and somehow Wall Street spent yesterday selling Alphabet like the building was on fire.
Let me get the recap going. Big Tech took a beating: the Nasdaq dropped about 1.3 percent, Alphabet ($GOOGL) swung roughly 5 percent lower, and the rest of the usual suspects, Nvidia ($NVDA), Amazon ($AMZN), Meta ($META), followed it down the stairs. The Dow, that museum of yesterday's economy, somehow eked out a small gain, because nothing says risk-off quite like buying industrials. The official narrative is triumphant. Uncle Donald has a memorandum of understanding with Iran, the Strait of Hormuz is reopening, oil is flowing, and the leader of the free world would very much like you to know he ended a war before lunch. Brent slid toward 78, WTI near 74, and le tout-Wall Street decided cheaper energy plus peace equals paradise. So why did tech get taken to the woodshed?
Because of the skunk at the party, and his name is Kevin Warsh. The new Fed chair held his first presser and, translation, told everyone the easing fairy is not coming. Nine of eighteen officials now pencil in a rate hike this year, inflation forecasts went up, core PCE projected at 3.3 percent, and rates stay at 3.50 to 3.75. A hawkish Fed in an election-adjacent economy. Who actually won yesterday? Not the longs. Certainly not the growth crowd, who bought peace and got handed a higher discount rate instead.
And everyone is pretending not to notice the obvious contradiction. The same administration cheering cheaper oil and roaring growth has a central bank openly worried that growth plus tariffs plus a war premium equals stickier inflation, not less. You cannot have the boom and the disinflation in the same press release. But we will try, because we always try.
The levels, cleanly. Gold around 4,129 and down about a percent and a half, the war hedge unwinding now that the war is allegedly over. WTI near 74, Brent near 78. Bitcoin somewhere between 62 and 64 thousand depending on which screen you trust, so call it uncertain and shrinking. The 10-year sits near 4.5 percent, which is the only honest voice in the room. S&P futures soft, Nasdaq futures the ugliest, down well over a percent before the bell.
Ahead today, flash PMIs, the third cut of GDP nobody reads, and final Michigan sentiment. The real event is PCE on Thursday, which means today is a holding pattern dressed as a trading day. Anyone claiming conviction before that number is selling something.
Bleak takeaway: peace arrived, and stocks fell anyway. Welcome to the wonderful world of finance. Stay sharp, see you tomorrow.