Morning Brief: US-Iran Technical Talks Wrap Up in Doha, Walsh Says Markets Betting on Rate Cuts Will Be Disappointed, June Nonfarm Payrolls Due Today

Key Snapshot

🕊️ Two rounds of indirect technical talks between the US and Iran concluded in Doha. Negotiators focused on Strait of Hormuz maritime transit rules and targeted financial relief for Iran, with no meaningful progress toward a long-term truce.

🏛️ Fed Chair Walsh reaffirmed the 2% inflation target is non-negotiable at the ECB Sintra Forum. He warned investors pricing in monetary easing would face disappointment and declined to signal a rate hike at the July FOMC meeting.

🛢️ WTI crude fell 1.32% to $68.58/bbl on fading geopolitical risk premiums; spot gold climbed 0.57% to $4,030 per troy ounce.

I. Market Outlook

Core Events

Indirect US-Iran technical negotiations closed out Wednesday in Doha, failing to deliver tangible progress on a lasting de-escalation framework. At the annual Sintra Central Bank Forum, Fed Chair Walsh struck a notably hawkish tone, underscoring the Fed will not compromise on its 2% inflation mandate and pushing back against widespread market bets on rate cuts, though he avoided commenting on potential July policy tightening.

Market Reaction

Broad profit-taking hit AI hardware stocks, sending major US benchmarks mixed. The Dow Jones Industrial Average lost 13.96 points to 52,305.24, the S&P 500 dipped 0.22% to 7,483.23, and the Nasdaq Composite shed 0.66% to 26,040.03.

Exclusive Insight

The Doha dialogue served solely as conflict risk mitigation rather than a permanent resolution. Deep-rooted divides remain unresolved: Iran mandates mandatory pre-clearance for all vessels transiting the strait, while the US upholds universal freedom of navigation.

Walsh’s Sintra remarks mark his most restrictive policy stance since taking office, putting him in direct opposition to Trump’s public calls for rate reductions. Today’s nonfarm payrolls release will be the final labor print ahead of the July FOMC; a stronger-than-consensus reading will sharply lift odds of a rate hike.

II. Overnight Market Performance

Summary

Muted diplomatic progress between the US and Iran paired with sector-wide profit-taking across AI hardware weighed on US equities, which closed mixed. Crude oil extended its downward trajectory.



— US Equities:

Dow Jones Industrial Average: -13.96 pts (-0.03%) to 52,305.24

S&P 500: -16.13 pts (-0.22%) to 7,483.23

Nasdaq Composite: -173.69 pts (-0.66%) to 26,040.03

💡 Visible profit-taking pressured AI hardware names after a powerful Q2 rally. Investors remained on the sidelines, awaiting directional cues from today’s pivotal jobs report.

— European Equities:

STOXX Europe 600: -0.40% close

DAX 30 (Germany): +0.18%

CAC 40 (France): -0.79%

FTSE 100 (UK): -0.18%

💡 Risk sentiment softened throughout the ECB Sintra Forum. Walsh’s hawkish rhetoric and lingering inflation pressures across the eurozone compressed regional equity valuations.

— Fixed Income:

US 10-year Treasury yield jumped nearly 5 basis points to 4.42%, marking its steepest single-day advance since June 22. The 2-year Treasury yield rose 2.5 bps to 4.164%.

💡 Walsh’s hawkish commentary triggered a broad repricing of Fed rate paths ahead of payrolls data, steepening the US Treasury yield curve.

— Commodities:

August WTI crude futures: -1.32% to $68.58/bbl

August Brent crude futures: ~-2.40% to $71.19/bbl

Spot gold: +0.57% to $4,030.87/oz

Spot silver: +0.90% to $59.0942/oz

💡 Oil benchmarks retreated amid lack of substantive diplomatic breakthroughs, though the longer-term easing of Hormuz shipping disruptions remains intact. Gold stabilized above the $4,000 threshold, with upside capped by moderate US dollar strength.

— Foreign Exchange:

US Dollar Index: +0.17% to 101.41

EUR/USD: -0.39% to 1.1376

USD/JPY: flat at 162.56

💡 The US dollar drew firm support from Walsh’s hawkish policy signals. The yen consolidated near its multi-decade low around 162, with market bets on BOJ currency intervention steadily building.

— Crypto Assets:

Bitcoin: +3.70% to $60,821.53

Ethereum: +3.95% to $1,629.66

💡 Digital assets staged a corrective bounce following sharp prior declines, yet broader upside potential stays constrained by restrictive Fed rate pricing. News of Trump’s $1 billion in crypto venture proceeds remains a dominant market talking point.

III. Macro News

🕊️ US-Iran technical talks conclude in Doha; maritime transit and fiscal relief top agenda, no long-term truce reached

Sources close to negotiations confirmed delegates spent two days revisiting Strait of Hormuz shipping protocols and proposed fiscal support packages for Iran — topics both sides claimed were near resolution two weeks prior. Bilateral cross-border strikes were paused ahead of the forum, even as Iran’s deputy foreign minister initially denied scheduled Doha negotiations.

Insight: The summit carried purely technical objectives with no overarching strategic framework. Core disputes over strait jurisdiction remain unaddressed: Iran enforces mandatory pre-approval for transiting vessels, while the US defends open navigation rights. Three distinct shipping corridors now operate through the Hormuz strait, forcing vessel operators and cargo holders to navigate complex geopolitical trade-offs.

🏛️ Walsh delivers Sintra Forum speech: 2% inflation target immutable, rate-cut bets will disappoint, no July tightening signal shared

Speaking at the ECB’s annual central bank forum in Sintra, Walsh pledged unwavering commitment to price stability, stating market participants wagering on monetary easing would face disappointment. He declined to address whether the Fed would implement a rate hike at the July meeting and announced a dedicated internal working group to analyze AI’s impacts on labor productivity and inflation dynamics.

Insight: This speech represents Walsh’s most restrictive monetary policy messaging since his appointment. His top prioritization of inflation stability creates direct friction with Trump’s public demands for rate cuts. By withholding forward policy guidance, the Fed retains full flexibility for the upcoming FOMC gathering.

📊 US June ISM Manufacturing PMI cools after hitting a four-year high in May

US factory activity lost momentum in June following a four-year peak in May, as temporary demand boosts from proactive inventory restocking faded to avoid supply bottlenecks and price inflation.

Insight: The pullback validates the view that May’s 54.0 print stemmed from precautionary stockpiling rather than sustainable industrial expansion. Whether cooling manufacturing activity alters Fed policy outlook hinges entirely on today’s nonfarm payrolls figures.

📉 Foreign investors withdrew $137.36 billion from Asian equities in H1, hitting a 16-year record outflow

After an AI-driven regional stock rally, overseas funds offloaded Asian shares at the fastest pace in 16 years, with South Korea and Taiwan recording the largest capital exodus.

Insight: The record $137.36 billion outflow signals a mid-cycle portfolio rebalancing following outsized gains across AI sectors, as global investors lock in accumulated profits. This does not signal a full retreat from AI exposure, merely valuation compression and position reshuffling. Chip-heavy markets such as South Korea and Taiwan face acute near-term liquidity headwinds.

IV. Corporate News

📰 Industry reports state Meta plans to launch a cloud computing division to monetize spare AI compute capacity; shares surged 8.8%

— Meta is adopting an AWS-style IaaS model to lease excess AI hardware infrastructure to third-party clients. The launch will introduce a new competitor to specialized compute providers including CoreWeave.

🍎 Apple set to implement steep price hikes for the iPhone 18 lineup, with Pro variants poised for a $200 price increase

— Inflated AI chip and memory input costs are fully passed through to retail consumers, following prior price adjustments across iPad and MacBook product lines.

V. Key Focus For Today

📊 US June Nonfarm Payrolls: Final labor dataset ahead of the July FOMC meeting. Consensus estimates range from 110,000 to 130,000 new payroll positions. Strong prints will amplify rate hike pricing; readings below 100,000 will reignite easing expectations. Goldman Sachs notes roughly 40,000 temporary World Cup staffing roles may skew the headline figure.

📋 US Weekly Initial Jobless Claims: Real-time gauge of labor market conditions to cross-reference alongside payroll data.

📊 US May Factory Orders & Durable Goods Orders: Fresh read on manufacturing demand, following a 7.9% month-on-month jump in April durable goods orders.

🗣️ Remarks from San Francisco Fed President Daly: First major Fed official commentary post-payrolls release, delivering core policy signals reflecting the committee’s interpretation of labor data.