Market Overview

U.S. crude (West Texas Intermediate, the American oil benchmark) fell 3.6% to $69.28 a barrel Friday as more tankers successfully exited the Strait of Hormuz — the narrow Persian Gulf chokepoint through which roughly 20% of global oil flows — easing the supply-disruption panic that had spiked prices earlier this week, per CNBC. The relief is fragile: a U.S. official confirmed Iran was behind an attack on a Singapore-flagged cargo ship near Oman, and analyst Scott Nations warned on CNBC that 'nothing really has been resolved' in the U.S.-Iran standoff. Making things messier for OPEC (the cartel that coordinates output among major producers), Iraq is reportedly threatening to quit the group after the UAE's exit in May, unless it receives a higher production quota. A fracturing cartel plus shaky diplomacy is a volatile combination — oil at $69 looks cheap until it suddenly doesn't.

Nasdaq futures fell sharply Friday as a broad tech selloff accelerated, with semiconductor (chip) makers leading the declines — the same group that has driven most of the index's gains this year, per WSJ Markets. Chips are the canary in the tech-valuation coal mine: when investors get nervous about AI spending cycles or macro headwinds, they sell the most cyclically sensitive names first. The selloff arrives alongside oil sliding toward pre-war levels, suggesting markets are simultaneously repricing both the risk-on growth trade and the geopolitical-premium trade that has dominated sentiment for weeks. Two major narratives unwinding at once rarely makes for a calm Friday close.

Two Federal Reserve presidents offered a mixed-but-cautious read on inflation Thursday: Chicago Fed's Austan Goolsbee acknowledged modest progress on services inflation but said the problem is squarely on the price side of the Fed's dual mandate (stable prices plus full employment), while New York Fed's John Williams expects core PCE — the Fed's preferred inflation gauge, currently running at a hot 3.4% — to ease toward 3.5% by year-end and hit 2% by 2028 (CNBC). Williams cited fading tariff pressures, a potential end to the Iran conflict easing energy costs, and moderating rent increases as his three reasons for optimism, yet still called current rate levels 'well positioned' — Fed-speak for no cuts anytime soon. Markets are pricing roughly a 30% chance of a rate hike at the July 28-29 FOMC meeting, a remarkable shift in expectations from the cut-obsessed consensus of early 2025. New Fed Chair Kevin Warsh has already stripped forward guidance from official statements, and Goolsbee openly applauded the move — meaning the Fed is deliberately keeping markets guessing, which is itself a policy message worth taking seriously.