The U.S. hit 90 Iranian targets Thursday. Iran struck American bases in Kuwait and Bahrain. Ship traffic through the Strait of Hormuz dropped from 49 vessels to 25 in a single day. And the S&P 500 gained 0.8%. The Nasdaq rose 1.2%. Micron surged 7.5%. Because somewhere over the Atlantic, aboard Air Force One, Donald Trump told reporters that Iran called to make a deal. One sentence. That's all it took. Twenty-four hours ago the ceasefire was "over." Today Qatar and Pakistan are working to restart talks. The bombs haven't stopped. The market doesn't care about the bombs. It cares about the phone call.
Green across the board. The S&P gained 0.8%. The Nasdaq rose 1.2% — its best day in a week. The Dow added 0.3%, held back by Honeywell's ongoing collapse after its aerospace spinoff. The tape flipped overnight when Trump said Iran had reached out, and it held all day despite fresh strikes on both sides.
| The Numbers I Circled |
At the close, July 9 · Day change |
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| S&P 500 |
bounced |
+0.8% |
| Micron (MU) |
$3B US invest |
+7.5% |
| Strait Traffic |
25 ships (was 49) |
−49% |
| S&P 500 Sectors |
Day change |
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| Info. Technology |
|
+2.0% |
| Health Care |
|
+1.0% |
| Consumer Staples |
|
+0.8% |
| Materials |
|
+0.6% |
| Financials |
|
+0.4% |
| Real Estate |
|
+0.2% |
| Utilities |
|
−0.2% |
| Energy |
|
−0.8% |
| Comm. Services |
|
−1.0% |
| Consumer Disc. |
|
−1.2% |
| Industrials |
|
−1.5% |
| Biggest Losers |
Day change |
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| Notable Gainers |
Day change |
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Micron led the chip bounce, up 7.5% after announcing a $3 billion investment in U.S. semiconductor manufacturing. The company is building out facilities in Texas and New York with plans to invest more than $250 billion over the next decade. The broader chip rally was real — memory names, equipment makers, and foundry stocks all participated. But the rally came at a cost somewhere else: Alphabet fell 2.5%, the biggest drag on both the S&P and the Nasdaq. The pattern from last week continued — when hardware stocks rise on spending announcements, the companies paying for that hardware get marked down. The picks-and-shovels split is still alive.
PepsiCo posted mixed results. Revenue beat at $24.18 billion — up 6.4% from a year ago, driven by strong international demand. But earnings missed by a penny — $2.20 versus the $2.21 consensus. North America was "softer than anticipated." The company reiterated its full-year forecast. Shares fell 1.8%. The read: the consumer is still spending overseas, but the American shopper is pulling back on snacks at $5 a bag. PepsiCo had already cut prices by up to 15% on Lay's, Doritos, and Cheetos in February. It wasn't enough.
Honeywell dropped another 9.2% — down 25% in three sessions since its aerospace spinoff. AstraZeneca fell 8% after a late-stage heart drug trial failed. Initial claims came in at 215,000, the lowest since May 23 — a sign that the labor market, while adding fewer jobs, isn't shedding them either. Oil reversed most of Wednesday's surge. Brent pulled back below $78. The Strait is still dangerous — 25 ships a day instead of 49 — but the market is betting the phone call matters more than the ship count.
What The Market Is Pricing In
Yesterday the ceasefire was over. Today Iran called. The Dow fell 577 points on Wednesday. It gained back a third of them Thursday. And the most important thing about today's session isn't the bounce — it's what the bounce tells you about how this market works.
The U.S. struck 90 Iranian targets on Thursday. Iran hit American bases in Kuwait and Bahrain. The Strait of Hormuz is running at half capacity — 25 vessels a day, down from 49. The violence escalated. The ship count fell. And the market went up. Not because the war is over — it isn't. Not because the Strait is safe — it isn't. The market went up because one man, on an airplane, said four words: "Iran called to make a deal." That was enough.
Here's why that makes sense. Every price you see on a screen is a bet on the future, not a description of the present. When a stock trades at $100, it's not telling you the company is worth $100 today. It's telling you the market thinks the company will be worth more than $100 in six months. On Wall Street they call this discounting — the price reflects what the market expects to happen, not what's happening now. Today the bombs are falling, the Strait is half-shut, and oil is still above $76. But the market is pricing in the phone call, not the bombs. It's pricing the next chapter, not the current one.
The S&P gained 0.8% on a day when the U.S. struck 90 Iranian targets and the Strait dropped to half capacity — because the market is discounting a deal, not a war, and one sentence from Trump on Air Force One was worth more to the tape than 90 airstrikes. This is how markets have always worked during conflicts. They sell the uncertainty and buy the resolution — even when the resolution is just a hint.
In October 1962, during the Cuban missile crisis, the S&P fell 7% in the first week. Then it rallied 10% in the three days after Kennedy and Khrushchev agreed to talk — before a single missile was removed from Cuba. The market didn't wait for the outcome. It priced the intention. Today's setup is the same: the weapons are deployed, the Strait is contested, the strikes are ongoing. But the market heard "Iran called" and decided the ending is more likely to be a deal than a war. Whether that bet is right depends on what happens over the next week. But the market has made its call.
Three things I'm watching tomorrow and into next week:
01 — Delta Air Lines earnings Friday July 10
The first airline to report Q2 numbers. Jet fuel tracks crude, and crude just whipsawed from $68 to $78 and back to $76 in one week. If Delta guides above expectations despite the oil spike — citing strong summer travel demand — it tells you the consumer is still booking flights even at higher fuel costs. If Delta warns on margins and cuts the guide, the oil spike is already bleeding into real-economy earnings. Airlines are the canary in the oil mine. This is the first test.
02 — June CPI Tuesday July 14
The most important inflation print of the summer. May CPI was 4.2%. The market was betting June would fall toward 3.5% on lower energy. But the ceasefire collapsed Wednesday and oil spiked 5%. June CPI covers data through June 30 — before the latest spike — so the number should still reflect the oil decline from May. If it comes in below 3.8%, the "inflation peaked" story survives the war scare. If it comes in above 4%, the hawks have their case. Same day: Warsh testifies before Congress, and JPMorgan, Bank of America, Goldman, Wells Fargo, and Citigroup all report. July 14 is the biggest single day of the quarter.
03 — Will "Iran called" become an actual meeting?
Trump said Iran reached out. Qatar and Pakistan are mediating. But Iran has denied direct contact before, and the Khamenei burial in Mashhad happens today — the final day of mourning. If a meeting date is announced by Monday, the market holds its bid and oil keeps falling. If no meeting materializes — if "Iran called" turns out to be an Air Force One improv — oil goes back to $80 and the Wednesday selloff repeats. The market bet today on a phone call. It needs a meeting to keep the bet alive.
The bombs are still falling. The Strait is half-shut. Oil is still above $76. And the market went up because one sentence changed the story from "war" back to "deal." Delta's earnings tomorrow and CPI next Tuesday will tell you whether the economy can handle the whiplash. But today's bounce told you something more basic: this market still believes the deal wins. Whether it's right is the question for July.
That's it for today. See you tomorrow after the close.
— Tom Hartley
Today In Perspective · Published daily, Monday–Friday, after the close
This newsletter is for informational purposes only and does not constitute investment advice. The author is not a registered investment advisor. Past performance does not guarantee future results. Consult a qualified financial professional before making investment decisions.
