Morning Brief: Washington launches fresh military strikes against Iran, Trump declares temporary truce “over”, crude jumps more than 5% while US stocks diverge

Core Snapshot

🛢️ The US carried out new rounds of airstrikes targeting Iran, with Trump stating the bilateral temporary truce is finished. WTI crude rallied 4.37% to $73.52/bbl, Brent climbed 5.20% to $78.02/bbl.

📉 US equities traded sharply split: Dow Jones tumbled 1.09% while Nasdaq edged up 0.20%, as tension mounted between energy and rate-sensitive tech sectors. The US 10-year Treasury yield hit a seven-week high of 4.597%.

🏛️ June Fed meeting minutes show heightened inflation concerns; a minority of policymakers saw grounds for rate hikes, yet all officials agreed to keep rates unchanged at the meeting.

I. Market Outlook

Core Catalysts

US military launched fresh airstrikes on Iran Wednesday to secure unimpeded shipping through the Strait of Hormuz, hours after Trump announced the temporary truce was terminated. At the NATO Summit, Trump took aim at Spain and revived discussion over Greenland’s acquisition, before softening rhetoric to claim the summit featured “utmost unity”.

The Fed’s June meeting minutes underscored mounting inflation risks; several voting members argued conditions warranted tighter monetary policy.

Market Reaction

US equities traded in stark divergence: Dow slumped 1.09% while Nasdaq eked out a 0.20% gain. The 10-year US Treasury yield rose 3.8 bps to 4.567%, touching a seven-week peak of 4.597% intraday. WTI crude surged 4.37% to $73.52/bbl, Brent rose 5.20% to $78.02/bbl.

Exclusive Insight

The fragile technical optimism from Doha talks lasted less than 24 hours before military action erased diplomatic progress. With Trump writing off the truce and launching strikes, market pricing has rapidly shifted from a cooling standoff to sustained conflict escalation.

Brent’s jump above $78 puts HSBC’s revised 2026 Brent forecast of $80/bbl under heavy scrutiny — the bank’s downgrade relied on an assumption of normalized Gulf oil exports by late September, a timeline now highly uncertain amid fresh hostilities.

II. Overnight Market Performance

— US Equities

S&P 500 -0.28% to 7,482.71

Nasdaq Composite +0.20% to 25,870.65

Dow Jones Industrial Average -1.09% to 52,348.39

💡 Geopolitical risk boosted energy names, yet rate-sensitive growth sectors faced heavy pressure from climbing Treasury yields, creating an unusual wide split between Dow and Nasdaq.

— European Equities

German DAX -2.23%, French CAC 40 -2.18%, FTSE 100 -1.66%

💡 Broad selloff swept European risk assets. Lingering geopolitical anxiety during the NATO Summit plus spiking US yields triggered deeper losses across European benchmarks.

— Fixed Income

US 10Y yield +3.8 bps to 4.567%, intraday seven-week high 4.597%

US 30Y yield +2.4 bps to 5.067%, also a seven-week peak

💡 Airstrikes stoked inflation fears, compounded by persistent hawkish signals from Chair Walsh. Long-end yields extended their upward march, with the 30-year benchmark reclaiming the 5% threshold.

— Commodities

August WTI crude +4.37% to $73.52/bbl

September Brent crude +5.20% to $78.02/bbl

Spot gold -0.73% to $4,076.31/oz; spot silver -2.83% to $58.2985/oz

💡 A massive geopolitical risk premium returned to crude markets. Bullion lost safe-haven appeal as a stronger dollar and rising real yields weighed on precious metals, with silver suffering steeper industrial-driven losses.

— Foreign Exchange

DXY spiked to 101.27 intraday before slipping 0.2% to settle at 100.98

EUR/USD +0.12% to 1.1425

💡 The safe-haven bid for the dollar faded quickly following the initial shock from US strikes. The euro retained resilience despite widening US-EU rate differentials.

— Crypto Assets

Bitcoin fell over 1.9% to $62,332.83; Ethereum lost more than 1.8% to $1,742.71

💡 Risk sentiment weakened across speculative assets. Cryptocurrencies tracked gold lower amid tightening liquidity and heightened geopolitical uncertainty.

III. Macro Headlines

🛢️ US launches new airstrikes on Iran; Trump declares temporary truce finished

US military carried out airstrikes on Iran Wednesday to safeguard transit through the Strait of Hormuz, shortly after Trump confirmed the de-escalation truce aimed at ending US-Iran hostilities was completely over.

Insight: Diplomatic gains from Doha talks collapsed within 24 hours amid military retaliation. Market pricing is fully shifting toward prolonged conflict, not a tentative ceasefire. Brent’s 5% single-day jump to $78 casts doubt over HSBC’s $80 year-end target, which hinges on export normalization by September.

🗣️ Trump criticizes Spain and revives Greenland bid at NATO Summit, then downplays divisions

During the NATO leaders’ gathering, Trump pressured Spain to cut trade ties and renewed interest in acquiring Greenland, before toning down friction to label the summit a display of strong unity.

Insight: The rapid shift between aggressive pressure and conciliatory rhetoric underscores Trump’s transactional diplomatic style. Repeated references to Greenland serve as leverage to reshape Europe’s security reliance on Washington.

📊 June FOMC Minutes: Minority of officials saw grounds for hikes, unanimous hold maintained

Minutes reveal policymakers feared broadening price pressures could warrant tighter policy. A small group argued rate hikes were justified, though all members voted to stand pat at the June meeting.

Insight: This marks the first documented hawkish split under Chair Walsh. The phrasing “at this meeting” signals far fewer constraints on July policy decisions; rate hikes remain on the table if inflation and payroll data print hot.

📊 IMF cuts 2026 global growth forecast to 3.0%, upgrades China’s outlook to 4.6% (2026) and 4.1% (2027)

The IMF flagged risks including Middle East warfare, trade fragmentation and AI growth re-pricing, while lifting China’s growth projections on solid export performance and policy support.

Insight: Escalating US-Iran tensions validate the IMF’s war-related downside risks. China’s upgraded outlook stands out globally, yet the 4.1% 2027 forecast still sits at multi-year lows.

🛢️ EIA: US petroleum product exports hit record 8.73 million barrels per day

For the week ending July 3, US energy firms shipped out 8.73 million bpd of refined products, surpassing the prior all-time high of 8.22 million bpd set in early May.

Insight: Record US fuel exports coincide with military strikes on Iran, amplifying America’s supply-side leverage amid Strait of Hormuz disruptions. US refined products gain greater substitution value for global buyers.

🛢️ HSBC slashes 2026 Brent forecast from $95 to $80/bbl

The bank assumes Gulf oil exports will return to normal volumes by late September to justify the downgrade.

Insight: HSBC’s target price relies on a de-escalation timeline now disrupted by fresh US airstrikes. A prolonged conflict could easily push Brent above the $80 baseline forecast.

IV. Global Corporate News

🤖 OpenAI rolls out real-time GPT-Live voice model, full GPT-5.6 deployment approved amid looser regulation

— Voice-first AI interaction becomes fully commercialized. Full rollout of GPT-5.6 signals softer regulatory scrutiny for OpenAI after strict prior approval protocols.

🤖 SemiAnalysis: Anthropic Q3 profit set to top $1 billion

— If realized, this will be the first major AI application firm to notch $1 billion quarterly profit, outpacing market estimates for AI commercialization speed.

💾 Apple commits $300bn partnership with Broadcom to manufacture over 150bn US-designed chips

— This is Apple’s largest single investment to de-risk its semiconductor supply chain away from Asian manufacturing. The $300bn deal will reshape domestic US chip production capacity.

V. Key Focus Today

📊 US Initial Jobless Claims: Real-time labor market read amid geopolitical shocks, cross-reference with next week’s nonfarm payrolls.

📊 US June Pending Home Sales: Gauge housing sector sensitivity to seven-week high Treasury yields.

🗣️ Speeches from NY Fed’s Williams and Dallas Fed’s Logan: Further policy signals following hawkish split revealed in June minutes.

🗣️ ECB President Lagarde speaks at EU Finance Ministers meeting; hints of early exit fuel leadership uncertainty.

📊 ECB June Monetary Policy Meeting Minutes: Side-by-side comparison with Fed minutes to track global monetary policy divergence.