The deal died. Trump said so from Ankara, at a NATO summit, between meetings with allies who will now have to figure out what comes next. "The memorandum of understanding is over." "We hit them very hard last night." "We'll probably hit them hard again tonight." "As far as I'm concerned, it's just a waste of time dealing with them." Iran attacked three commercial ships in the Strait of Hormuz over the past two days. The U.S. responded with a series of strikes on Iranian military targets. Iran struck back at American sites in Bahrain and Kuwait. The ceasefire that started on June 18 lasted twenty days. Oil surged 6%. The Strait threat level was raised to "severe." And two hours after the bombs, the Fed released the minutes from its June 17 meeting — the ones that revealed several officials were ready to cut rates this year if the conflict "resolved soon." The conflict did not resolve. It got worse. The dovish case died the same afternoon it was published.
The Close
Split close. The Dow fell about 500 points — roughly 1%. The S&P dropped 0.2%. And the Nasdaq — somehow — closed green, up 0.2%, after opening more than 1% lower. The Dow fell because it's full of companies that price oil: industrials, transports, consumer names. The Nasdaq recovered because tech found a reason to buy: Apple announced a $30 billion chip deal with Broadcom before the open, and Alibaba surged 11.6%
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| Brent Crude | above $76 | +6% | ||
| Dow Jones | ~52,500 | −500 pts | ||
| Nasdaq | green on war day | +0.2% | ||
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| Energy | +3.0% | |||
| Info. Technology | +1.0% | |||
| Comm. Services | +0.6% | |||
| Health Care | +0.4% | |||
| Utilities | −0.2% | |||
| Real Estate | −0.4% | |||
| Financials | −0.6% | |||
| Materials | −0.8% | |||
| Consumer Staples | −1.0% | |||
| Consumer Disc. | −1.5% | |||
| Industrials | −2.0% | |||
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The morning was ugly. Futures were down 1% across the board before the bell. Trump's comments from Ankara — "it's over," "we'll hit them again tonight" — sent oil up 6% to two-week highs and the Strait threat level to severe. Iran had attacked three commercial vessels over two days. The U.S. responded with strikes. Iran hit back at American bases in Bahrain and Kuwait. The 60-day MOU clock is now meaningless. There is no clock when the deal is off.
Apple's $30 billion deal with Broadcom was the day's counterweight. The multi-year agreement covers more than 15 billion U.S.-made chips and includes a $1.5 billion expansion of Broadcom's facility in Fort Collins, Colorado. It's Apple's biggest American manufacturing commitment. Broadcom rose 5.9%. Arista gained 7%. The deal reminded the market that the tech supply chain has its own logic — chip demand doesn't stop because a tanker gets hit in the Strait.
The FOMC minutes arrived at 2 PM. The June 17 meeting — Warsh's first as chair — was unanimous on holding rates. But the internal debate was not unanimous at all. A majority said a rate hike would be warranted if inflation persists. Several said rate cuts would be warranted if the conflict resolved soon and inflation pressures dissipated. The pause is expected to extend longer than previously thought. Warsh called it "a good family fight." The staff flagged elevated uncertainty from both the Middle East and AI investment, with inflation risks tilted to the upside and growth risks tilted to the downside.
Bonds rallied on the flight to safety. The 10-year yield dipped to 4.55%. The 2-year fell to 4.18%. Gold dropped — precious metals fell more than 2% as margin calls from the oil spike forced selling across commodity desks.
What The Market Is Pricing In
The FOMC minutes told you, at 2 PM on Wednesday, that several Fed officials were counting on this deal to survive. The exact words: "Several participants indicated rate cuts would be warranted later this year in a scenario in which conflict was resolved soon, and inflation pressures dissipated." By 2 PM on Wednesday, the conflict had not resolved. It had restarted.
Here's the chain. Oil was at $68 last Wednesday. It's above $76 today — up more than 10% in a week. The ceasefire held oil down. The ceasefire is gone. OPEC+ added production last week, but that's 188,000 barrels a day against a Strait that handles 20% of the world's oil traffic. If the Strait closes again — and the threat level is now "severe" — the supply math changes overnight. Every barrel that doesn't come through the Strait has to come around the Horn of Africa, which adds two weeks and $2 million per tanker. That cost gets passed to refiners, then to gas pumps, then to the CPI print.
The minutes revealed a committee split three ways. The hawks — a majority — said hike if inflation stays high. The doves — "several" — said cut if the war ends and prices fall. And the middle — Warsh's camp — said hold and wait for data. The ceasefire collapsing doesn't just hurt the doves. It strengthens the hawks. Oil above $76 means July CPI is not going to fall the way June was supposed to. The energy costs that the market spent two weeks removing from its inflation forecast are back.
The Fed released minutes showing several officials were ready to cut rates if the war ended — and on the same afternoon, Trump declared the ceasefire over from Ankara, oil surged 6%, and the dovish case died on the day it was published. The Dow fell 500 points because it prices the oil economy. The Nasdaq closed green because Apple signed a $30 billion chip deal that has nothing to do with the Strait. The market is now doing what it did in August 1990 when Iraq invaded Kuwait: separating the companies that need cheap oil from the ones that don't.
In 1990, the Dow fell 18% in two months as oil doubled. Defense stocks held up. Tech held up. Airlines and transports got crushed. The split lasted until the war ended in February 1991. Today's split looks the same: energy and defense on one side, industrials and transports on the other, and tech running its own race entirely. The question isn't whether the market goes down. It's which parts go down and which parts don't. The Nasdaq answering that question today — green on a day the ceasefire ended — is the most important signal of the session.
What's Next
Three things I'm watching the rest of this week:
01 — Does the Strait close again?
The naval threat level is severe. Three tankers were hit this week. Iran is escalating during the funeral processions. If shipping insurers pull coverage for Strait transit — the way they did in March — the chokepoint functionally closes even without a military blockade. Watch Lloyd's of London and the war-risk premium on tanker insurance. If premiums spike above $1 million per transit, carriers reroute. Oil goes to $85. If the Strait stays open despite the violence — tankers sailing through with military escorts — oil holds near $76 and the damage is contained.
02 — Does Trump walk it back?
He said "it's over" and "we'll probably hit them again tonight." But he also said negotiators can "keep talking if they want." And the IMF still assumes the Strait reopens this month. Trump has escalated and de-escalated the Iran situation four times since March. If he walks the rhetoric back by Thursday — or if a back-channel emerges through Qatar — the market prices the ceasefire as broken but fixable, not dead. If he doesn't — if strikes continue Thursday night — the market prices a new phase of the war and the Dow loses another 500 points.
03 — PepsiCo earnings Thursday July 9
The first major consumer-facing company to report Q2 results. PepsiCo tells you whether the consumer is still spending at 4.2% CPI and $3.80 gas. If volumes hold and the company guides above consensus, the consumer story survives the inflation scare. If volumes dropped — especially in snacks and convenience — the labor market softening from the 57,000 jobs report is spreading into spending. The number also tells you whether companies are absorbing cost increases or passing them on. That pass-through rate is what the Fed watches when deciding between hold and hike.
The ceasefire lasted twenty days. Oil is back above $76. The Fed's doves were counting on a deal that just fell apart. And the market split — Dow down, Nasdaq up — is telling you that the second half of 2026 is going to be about who needs cheap oil and who doesn't. Tomorrow's PepsiCo number tells you how the consumer is holding up. The Strait tells you how far oil goes. And Trump — as always — tells you whatever he tells you next.
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.
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