Morning Brief: Trump Says No Rush for Iran Deal, Warsh Sworn In as Fed Chair, S&P 500 Rises for 8 Straight Weeks

At a Glance

🛑 Trump rules out hasty negotiations with Iran, and US military blockades will remain in place, easing market hopes for an immediate diplomatic breakthrough.

🏛️ Kevin Warsh takes office as Fed Chair, committing to steer a reform-driven Federal Reserve. Trump calls for full institutional independence, while noting economic growth does not inherently fuel inflation. 📈 The S&P 500 notches an eight-week winning streak, its longest run in more than two years. The Dow Jones clinches fresh record highs for two consecutive trading days.

📈 US consumer confidence tumbled to a historic low of 44.8 in May, with five-year inflation expectations climbing to 3.9%.

1. Market Outlook

Core Events

Trump stated on Sunday that US negotiators will refrain from striking a hasty agreement with Iran. Senior administration sources confirmed no deal would be sealed within the day. Iran has reached tentative consensus to reopen the Strait of Hormuz, in exchange for US sanctions relief and disposal of its high-purity enriched uranium stockpile.

2. Overnight Market Performance

Core Summary

Market sentiment stayed resilient despite Trump’s restrained remarks on Iran talks. US equities maintained upward momentum, with the S&P 500 securing eight consecutive weeks of gains.

US Equities

• Dow Jones: +294.04 pts (+0.58%) to 50,579.70
• S&P 500: +27.75 pts (+0.37%) to 7,473.47
• Nasdaq: +50.87 pts (+0.19%) to 26,343.97 💡 The eight-week rally is the longest upward cycle since late 2023. The semiconductor sector outperformed the broader market amid strong gains from Qualcomm and AMD. Nvidia’s weekly decline reveals growing performance gaps across AI chip players.

European Equities

• STOXX 600: +0.73% to 625.12, registering the sharpest weekly advance in seven weeks 💡 Falling crude prices and ECB official remarks buoyed European stocks. Still, record-low consumer confidence exposes underlying economic vulnerabilities.

Fixed Income

• US 2Y yield: 4.123% (+4.4 bps)
• US 5Y yield: 4.255% (+1.3 bps) 💡 Hawkish comments lifted short-term bond yields. Markets have largely priced out rate cut prospects and begun factoring in potential tightening moves.

Commodities

• WTI (Jul): $96.60/bbl (+0.26%), weekly loss 4.38%
• Brent (Jul): $103.54/bbl (+0.94%), weekly loss 5.24%
• COMEX Gold: $4,521.00/oz (-0.41%), weekly loss 0.76%
• LME Copper: +1.12% to $13,668/ton 💡 Crude saw mild intraday rebound yet sustained notable weekly losses. Higher real interest rates weighed on gold prices. Industrial copper gained traction on upbeat AI demand forecasts.

FX

• DXY: 99.24 (+0.04%)
• EUR/USD: 1.1602 (-0.14%)
• USD/JPY: 159.19 (+0.14%) 💡 Hawkish Fed rhetoric underpinned mild dollar appreciation. The yen hovers close to the 160 intervention threshold.

Crypto

• Bitcoin: $75,800, down over 2.3% 💡 Bitcoin failed to break out from narrow trading ranges. Capital flows tilt toward traditional technology stocks.

3. Macro Highlights

🏛️ Kevin Warsh formally assumes Fed Chair, commits to reform-focused governance and learning from historical policy errors Trump affirmed full support for the new leadership, endorsing independent decision-making while emphasizing growth and inflation do not move in lockstep. He viewed stock gains as market recognition of Warsh’s appointment. Insight: The presidential attendance at Fed inauguration carries rare political implications. Though pledging independence, the interaction hints closer political linkage. Warsh’s focus on institutional construction lays groundwork for future monetary shifts.

📉 May US consumer confidence sinks to all-time low at 44.8, five-year inflation expectations rise to 3.9% Final reading trails preliminary figures and April data, with inflation sentiment worsening notably among independent and Republican voters. Insight: Confidence levels now surpass lows seen during the financial crisis and pandemic. The disconnect between buoyant equities and depressed public sentiment widens sharply, posing potential risks for mid-term elections.

🗣️ Fed Governor Waller advocates abandoning dovish tendencies, calling current rate cut discussions unreasonable He holds no immediate rate hike preference, yet insists rates should stay steady until inflation visibly converges toward the 2% target. Once a prominent advocate of easing, his stance shift carries substantial policy influence. Insight: Waller’s hawkish turn marks a pivotal policy shift under Warsh. Market discussion has shifted from timing rate cuts to evaluating the necessity of policy tightening.

🇪🇺 ECB President Lagarde: Iran-related tensions will keep eurozone inflation elevated even with swift Strait reopening Price pressure will linger due to delayed cost transmission and supply chain restoration cycles. Insight: Lagarde’s reference to lagging effects indicates inflation will not ease rapidly after crude declines. Another interest rate hike remains probable in July following June’s expected adjustment.

4. Corporate News

🤖 Anthropic valuation may surpass $900 billion to outpace OpenAI, with over $30 billion financing set to complete as early as next week OpenAI maintains heavy losses while Anthropic has achieved operational profitability. Profitability visibility becomes the core driver of valuation divergence. Capital markets favor AI firms with viable profit models over those prioritizing scale expansion at high costs.

🚀 Successful Starship launch boosts SpaceX IPO appeal; US space-themed ETFs attracted $1.3 billion capital inflows within one month The launch milestone serves as a key valuation catalyst. Retail investor enthusiasm driven by fear of missing out pushes capital inflows, meanwhile raising risks of overcrowded trading positions.

💻 Microsoft revoked internal access to Claude Code amid surging token billing expenses Cost concerns rather than functional defects led to the adjustment. AI coding service pricing mechanisms remain immature, facing mounting cost pressure from enterprise clients.

🚀 AMD locks TSMC production capacity through 2029 amid persistent industry supply shortages; 2nm Venice chips enter mass production Rising AI agent demand expands market demand coverage from GPU to CPU products. AMD evolves from a secondary chip supplier into dual CPU and GPU vendor. Long-term capacity reservation secures market share amid tight industry supply.

📈 UBS lifts KOSPI target by 26% to 9,200, forecasting 68% earnings growth for non-tech sectors in 2026 Aggregate index EPS growth is projected at 258%, reflecting broad-based business recovery. The remarkable earnings forecast stems from reasonable valuation levels outside core semiconductor giants. South Korean equities witness growth momentum spreading from single semiconductor sector to diverse industries.

5. Today’s Key Focus

🕊️ Track policy adjustments from Iran following Trump’s restrained negotiation stance, and monitor implementation details regarding the tentative Strait reopening agreement