A blockade on Iranian shipping and a much cooler than expected inflation report sent global markets through a two-day reversal this week.
Key Takeaways
The S&P 500 fell 0.79% to 7,515.34 Monday after Trump reinstated a blockade on Iranian ports.June CPI fell to 3.5% year over year, below the 3.8% forecast, lifting bitcoin near $64,000.Fed Chair Kevin Warsh testifies before Congress today as the FOMC’s next meeting lands July 29. His statements may change market sentiment.Crude prices moved sharply on the blockade news. West Texas Intermediate settled up at $79 a barrel, and Brent crude closed above $83, its biggest one-day percentage gain in more than six years.
Equities fell across the board. The S&P 500 dropped 0.79% to close at 7,515.34. The Nasdaq Composite lost 1.55% to finish at 25,873.18, weighed down by chipmakers. SK Hynix fell 9% after its Nasdaq debut the prior week, and Micron Technology dropped 4%. The Dow Jones Industrial Average slid 138 points, or 0.26%, to 52,498.64, cushioned somewhat by energy shares.
CPI Flips the Script Why It Matters Energy costs pass through to headline CPI fast, but the Fed’s preferred core inflation gauge, which excludes food and energy, has stayed closer to 2.8% to 2.9%. Bitcoin and equities moved almost in lockstep this week, reflecting Bitcoin’s continued high correlation to Nasdaq-style risk assets. Gold‘s Monday decline despite active fighting near a major oil chokepoint shows how rising real yields can outweigh safe-haven demand. What Comes Next
