TL;DR

Fed split on July rate cut; Iran-Israel tensions lift energy risk; chip, tech stocks pressured on U.S. actions.

Highlights

• Fed Governor Waller signals a July rate cut is possible, diverging from Chair Powell’s more cautious stance; rate futures assign ~10% odds to July easing 1.
• U.S. considers ending export waivers for Samsung, SK Hynix, and TSMC in China, pressuring semiconductor supply chains; chip stocks retreat 2.
• U.S. tariffs on Chinese small parcels cut May e-commerce shipments by 40%, impacting Shein, Temu, and logistics providers 3.
• Iran launches ballistic missiles at Tel Aviv and Haifa; U.S. increases naval presence to five destroyers in the Eastern Mediterranean 67.
• U.S. imposes new sanctions on Iran’s defense supply chain and Houthi-linked oil networks; QatarEnergy warns Israeli strikes on Iran could threaten 20% of global LNG supply 45.
• Baker Hughes reports eighth straight weekly decline in U.S. oil rig count, signaling continued supply tightening 8.
• Supreme Court allows fuel producers to challenge California’s EV and emissions rules; issues additional rulings curtailing federal agency power 1018.
• Japan to cut ultra-long bond issuance amid rising yields and reduced BOJ demand; yen seen under pressure 17.
• Accenture beats Q3 estimates but bookings decline, sending shares lower; CarMax surges on strong earnings, Kroger raises sales outlook 1415.
• Senate parliamentarian blocks GOP attempts to cut CFPB/Fed pay in Trump’s tax bill, complicating legislative path 19.
• Coinbase secures EU MiCA license, shifting its European hub to Luxembourg; U.S. Senate passes stablecoin bill with Chainlink involved in technical standards 1112.
• Tesla to launch Model Y Robotaxi service in Austin; Wedbush sees $1T AI-driven upside, $2T market cap by 2026 20.

Commentary

Markets are closing the week with a mix of macro and sector-specific catalysts. Fed Governor Waller’s openness to a July rate cut, despite Powell’s recent caution, highlights a growing policy divide 1. While the market is not yet pricing in a near-term move, any further signs of labor market cooling or subdued inflation could shift expectations. This keeps Treasury yields and the dollar sensitive to upcoming data and Fedspeak.

Geopolitical risk is elevated after Iran’s direct missile strikes on Israel and the U.S. Navy’s increased destroyer presence in the Mediterranean 67. New U.S. sanctions targeting Iran’s defense and Houthi oil networks, combined with QatarEnergy’s warning on LNG supply, put a premium under energy markets 45. The eighth consecutive weekly drop in U.S. oil rigs adds to supply concerns 8, though OPEC+ currently sees no need for further action 16. Energy and defense names may see continued volatility.

In tech and industrials, the U.S. move to potentially end export waivers for major Asian chipmakers’ China operations pressured semiconductor stocks and adds uncertainty to global supply chains 2. U.S. tariffs on Chinese small parcels are already reducing e-commerce flows, affecting platforms like Shein and Temu and shifting logistics strategies 3. Meanwhile, Tesla ’s upcoming Robotaxi launch and bullish AI-driven valuation targets keep the stock in focus 20, while Accenture ’s bookings decline and CarMax’s strong results highlight diverging trends in enterprise and consumer spending 1415.

Regulatory developments remain active. The Supreme Court’s rulings open the door for legal challenges to California’s vehicle emissions rules and signal a broader trend of curbing federal agency power, raising uncertainty for regulated sectors 1018. In crypto, Coinbase ’s new EU license and the Senate’s stablecoin bill point to increased regulatory clarity and institutional participation 1112.

Traders should watch for late-session moves in energy, semiconductors, and high-beta tech, as well as currency volatility tied to Japanese bond market adjustments and Middle East headlines 17. Defensive positioning may be warranted given geopolitical risks, but sector rotation and stock-specific catalysts remain key into the close.