Morning Brief: U.S.-Iran tensions escalated on fresh military strikes, while cooler U.S. PPI eased Fed hawkish pressure.

Core Snapshot

⚠️ The U.S. launched new strikes against Iran’s coastal defenses and missile bases. Iran warned of an “existential war” and threatened broader energy supply disruptions.

📊 U.S. June PPI dropped 0.3% month-on-month, marking the largest decline in 14 months on falling energy costs.

📈 The S&P 500 notched a second consecutive gain, rising 0.38% to near a one-month high, led by strong tech performance.

I. Market Outlook

Key Catalysts

U.S. military strikes escalated ongoing conflicts with Iran, lifting geopolitical risk premiums. Crude oil edged higher but remained range-bound, as markets await actual supply interruption evidence.

U.S. June PPI cooled sharply, adding further disinflation evidence following soft CPI data. Treasury yields and the U.S. dollar declined significantly on diminished near-term rate hike expectations.

Exclusive Insight

Dual inflation data cooling solidifies a July Fed pause, yet easing momentum remains fragile. Rising oil prices and persistent geopolitical risks could revive inflation pressure in August. The market has fully priced peak inflation but underestimated ongoing Middle East risk volatility.

II. Overnight Market Performance

— US Stocks: Dow +0.29%, S&P 500 +0.38%, Nasdaq +0.62%. Tech stocks led the broad market rally.

— European Stocks: STOXX 600 +0.1%. Regional indexes diverged amid mixed risk sentiment.

— Fixed Income: US 10Y yield fell 4 bps to 4.545%. Bond prices rallied on soft inflation data.

— Commodities: WTI Crude +0.33%, Brent Crude +0.26%. Gold and silver corrected lower despite dollar weakness.

— Forex: DXY tumbled 0.55% to a mid-June low. Euro and Sterling strengthened sharply; USD/JPY stayed stable.

— Crypto Assets: Bitcoin topped $65,000; Ethereum rose over 2%.

III. Macro Headlines

⚠️ U.S. strikes Iran, Tehran warns of existential conflict

U.S. military strikes targeted Iran’s coastal and missile facilities after resuming maritime blockades. Iran vowed firm resistance and threatened to disrupt regional energy exports, escalating geopolitical uncertainty.

🏛️ Walsh keeps policy stance ambiguous

Walsh stated Fed policy options are not limited to rate hikes, refusing to offer clear forward guidance. Markets fully priced a July pause, with no fresh hawkish signals to reverse dovish expectations.

📊 Fed Beige Book: Economy improves, inflation eases

The report confirmed improving economic activity and moderating inflation pressure. Wage growth remained subdued, limiting the transmission of service inflation.

📉 June PPI posts 14-month largest drop

Falling energy costs drove the sharp PPI decline, reinforcing disinflation trends. Still, rebounding oil prices suggest inflation cooling may be temporary.

🇨🇦 Bank of Canada holds rates steady

Canada maintained its policy rate at 2.25%, in line with market expectations. Policymakers expect improving growth amid easing inflation, with oil volatility as the key uncertainty.

📉 SpaceX falls below IPO price

SpaceX slipped 2.7% and broke its $135 IPO offering price. Cooling sentiment toward high-profile IPOs may weigh on Wall Street’s Q3 investment banking revenue.

IV. Global Corporate News

📉 SpaceX breaks IPO price: Market sentiment toward speculative large-cap IPOs weakened amid valuation corrections.

💾 ASML secures long-term AI chip demand: EUV capacity is nearly fully booked through late 2027, with room for further equipment price hikes.

🚀 Anthropic accelerates IPO plan: The AI firm targets an October listing, set to become a landmark application-layer AI public company ahead of OpenAI.

V. Key Focus Today

· South Korea BOK Rate Decision: Monitor policy stance amid domestic semiconductor volatility and regulatory tightening.

· Fed Officials Speeches: Comments from Logan and Jefferson will validate July rate pause expectations.

· U.S. Retail Sales & Jobless Claims: Gauge consumer resilience and marginal labor market changes.

· UK May GDP Data: Verify economic recovery momentum after recent Sterling strength.