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Apple, Microsoft Tumble On Abrupt Price Hikes Amid Chip-Crunch Contagion; Wall Street Responds

Summary:

• Memory Chip Crunch Crisis May Unleash Flood Of Consumer Device Companies Hiking Prices 
• Microsoft Hikes Prices on Xbox 
• Apple Hikes Prices on Macs and iPads

Wall Street Responds To Apple Hikes 

Apple shares were down 5.5% in late-afternoon trading, on track for their largest intraday decline in 15 months, as the stock tumbled into correction territory. Shares are now down about 14% from their early June peak near $317.

Investors appear spooked by Apple's rare overnight price hike, which boosted Mac computers by 15% to 20% and iPad prices by 15% to 25%.

An Apple spokesperson said that "the rapid expansion of AI data centers has created an extraordinary surge in demand for memory and storage" and that the company has "never seen a component price increase this much, this quickly."

JP Morgan equity research analyst Samik Chatterjee offered clients three takeaways from Apple's price hikes:

1. Higher-than-expected magnitude of price increases on announced SKUs could drive pressure on volume expectations for Macs and iPads, which have been able to deliver robust share gains recently with Apple delaying price increases relative to competition.

2. The magnitude of the price increases announced leads us to believe that our earlier expectations for a mid-single-digit increase in iPhone pricing in conjunction with an announced launch in September is likely to be too optimistic, although we still expect Apple to use additional levers to limit the magnitude of price increases on iPhones with greater volume and installed base implications relative to the price increase announced today

3. The company continues to balance market share, revenue growth, and profitability objectives, which should reassure investors around the resilience of earnings growth drivers.

Price Hikes:

Wedbush analyst Dan Ives noted, "While Apple is well known for using its huge memory and storage purchases as leverage to secure low prices, the current memory price increases have forced Apple's hand to raise prices, but we believe the company is in a strong position to increase prices without sacrificing hardware performance and risking increasing customer churn given the company's increasing focus on the higher-end consumer." 

UBS analyst David Vogt also responded to the price hikes, telling clients that while no new iPhone price adjustments were announced on Thursday, there is reason to believe that "iPhone price increases are likely in the fall."

Vogt explained:

We expect iPhone price increases in the fall but likely flows in FY27 ests In conjunction with the expected launch of new iPhones in the fall, we expect Apple to lift effective prices anywhere from $50 to $100 along with possibly changing specs to offset the share rise in DRAM and NAND. For a typical $1,000 iPhone, memory was around $50 to $60 or a mid-single digit % of the BOM before the sharp rise in memory prices. With normalized/blended iPhone gross margins in the low 40s% range prior to recent memory dynamics, memory related BOM depending on the nature of LTAs could now be ~20% implying a broad based price increase approaching $100 could be an offset, hence we forecast 'Product' gross margin stability in FY27 in the 37-38% range.

Beyond Apple's price hikes on Thursday, Microsoft also raised prices on Xbox consoles, suggesting the memory-chip squeeze can not be contained by big tech consumer device companies. MSFT shares were down around 2.4% in late afternoon trading. 

We expect more device makers heavily exposed to memory chip price volatility to adjust prices in the coming weeks and months, especially given the chip crunch will persist through year's end.

Apple Price Shock: Macs And iPads Jump $200 Or More As Memory Crisis Worsens

Readers were warned as early as late January to front-run the coming memory shortage by purchasing their favorite electronics, whether PCs, laptops, TVs, smartphones, or anything else dependent on high-end memory chips, as unprecedented data-center demand was already beginning to emerge.

Fast forward nearly five months, and just two weeks after Apple CEO Tim Cook warned that "price increases are unavoidable" for laptops and other devices, a Wall Street Journal report has confirmed that those hikes have now been passed along, potentially delivering sticker shock to customers.

Here's what happened earlier: The Apple Online Store briefly went down, and when it came back online, prices for Mac computers jumped 15% to 20%, while iPad prices increased 15% to 25%.

The company briefly took down its Apple Online Store early this morning as it typically does when announcing new products. When it came back online, the price tags for Mac computers rose roughly 15% to 20% and iPad prices rose 15% to 25%. Among the price increases, the base MacBook Air rose $200 to $1,299; the base MacBook Pro increased $300 to $1,999; the entry-level MacBook Neo increased $100 to $699. The iPad Air increased $150 to $749 and the iPad Pro increased $200 to $1,199. -WSJ

Vision Pro became even more unaffordable.

*APPLE RAISES VISION PRO HEADSET PRICE TO $3,699 FROM $3,499

*APPLE HOMEPOD NOW $349, HOMEPOD MINI IS $129, APPLE TV TO $199

— zerohedge (@zerohedge) June 25, 2026

However, iPhone prices remained unchanged, but the company told the outlet in a statement that additional price hikes could be on the way.

"We have now reached a point where we need to begin raising prices," Apple said in the statement. "We have never seen a component price increase this much, this quickly."

An Apple spokesperson placed the blame on the "rapid expansion of AI data centers, which has created an extraordinary surge in demand for memory and storage," and this is why component prices surged.

Earlier this month, Cook told WSJ that price increases had become "unavoidable" because of higher component costs, adding, "There's less supply at a time when consumers want devices, and the memory guys are passing along huge price increases."

Apple has historically revealed price hikes with new launches of iPhones, iPads, and other devices, making this overnight price hike extraordinarily rare.  

The high-end chip market is dominated by US-based Micron and South Korea's SK Hynix and Samsung, which have all seen massive demand for high-bandwidth memory from AI "hyperscalers" such as Google, Meta, and Amazon.

Apple's price hikes come hours after Micron delivered blowout quarterly earnings, touting gross profit margins that topped 80%. Shares soared nearly 18% in premarket trading.

Micron executives told investors that "tight conditions" will persist beyond 2027 and that only suggests further price hikes are coming not just for Apple but also for other major big tech firms that sell devices.

Micron Chief Business Officer Sumit Sadana said in a WSJ interview last night that "a couple of the customers who were being very aggressive with pricing at that time were not constructive," without naming Apple...

Sadana noted, "A lot of the industry investments got shut down in 2023 because of really poor pricing and really poor margins."

A recent Morgan Stanley note found that memory prices have climbed sixfold over the past year, with new manufacturing capacity likely to take years to build and ramp up.

The iPhone price hike may be unavoidable: JPMorgan analysts estimate DRAM and NAND could jump from roughly 10% to 15% of an iPhone's total component cost today to more than 45% by 2027.

Memory price spikes are already showing up in the Producer Price Index for semiconductor and other electronic component manufacturing.

At what point does Trump start raging at soaring memory prices

PPI Electronic Components is pulling entire core index higher pic.twitter.com/v9ufHmx0gG

— zerohedge (@zerohedge) June 11, 2026

... and at what point does President Trump start raging at memory prices, just as his administration has successfully sent oil prices crashing by entering a diplomatic phase with Tehran to secure a permanent peace deal?

Tyler Durden Thu, 06/25/2026 - 14:50

Top JPMorgan DEI Executive Identified And Fired In NYC Trash Can Viral Video

Authored by Jonathan Turley via jonathanturley.org,

The viral video of a woman stealing a trash can and dumping its contents after the Knicks' victory has led to her termination. Angie Baez, 40, was the "Executive Director of Community and Industry Engagement for Card and Connected Commerce" for JPMorgan Chase.

She was shown in a video dumping trash on the ground to steal a Knicks-colored trash can after the NBA Finals. JPMorgan apparently concluded that this was neither the publicity nor the type of Community Engagement they are seeking.

The videotape of the incident shocked many by Baez's cavalier attitude, not just in stealing the trash can but in dumping out the garbage.

        View this post on Instagram                      

A post shared by New York Post Sports (@nypostsports)

The New York Post later reported that the woman had been identified as Angie Baez. She previously served as "Executive Director of Diversity, Equity, and Inclusion" at The Infatuation, a website that reviews restaurants and neighborhood activities.

Once she was identified, JPMorgan Chase issued a statement, "This employee is no longer with the company."

We have often discussed the difficult questions surrounding the termination of employees for speech in their private lives that is considered harmful to an employer. Whether it is conduct or speech, private companies often reserve the right to terminate any employee who brings negative attention to the company, even when they do not reference or display an association with the company. In today's web-savvy world, it does not take long for motivated individuals to learn the identity and associations of public figures.

We have seen companies fire employees for drunken displays and abusing others in viral videotapes. There is little recourse in such cases, particularly for at-will employees.

In the case of Baez, she falls into the same category as Adam Smith (not the economist), who made a fool out of himself at a Chick-fil-A.

Ultimately, Baez was not even allowed to keep the trash can. She was also given a $75 fine for littering and a $100 fine for impeding Department of Sanitation operations. That proved to be an expensive memento for the Knicks victory.

Tyler Durden Thu, 06/25/2026 - 14:40

Trump Cuts Off NATO's Mark Rutte In Oval Office After Sitting Out Iran War

As expected, President Trump took the opportunity to chastise NATO for its lack of participation in the Iran war while hosting the alliance's Secretary General Mark Rutte at the White House.

"We didn’t need help on this at all. We demolished them in literally the first week," Trump said of Iran before reporters, while seated across from Rutte. That's when the president said, "But it would have been nice if they would have said, ‘We’d like to help.’ We didn’t even need it, but it would have been nice if they said that."

via Associated Press

Throughout the conflict Trump has openly mused about pulling the United States out of the military alliance - or also at least withholding significant defense funding, and suggested in the Wednesday meeting that he'd be discussing the issue with Rutte behind closed doors.

"We’re going to be discussing what took place, and we’ll see what happens," he said.

Despite general negativity heaped on NATO's lax response to the Hormuz crisis and Iran campaign, Trump still offered a little praise of Rutte - who has long been generally supportive of the Trump White House.

Rutte in turn hailed Trump as "the leader of the free world" and stressed "I really want to make clear how important it is what you are doing on Iran."

"This is, first of all, about the nuclear capability Iran was basically getting its hands on - and it would have been a threat to the region. It would’ve been a threat to the whole world. This is a country that is exporting chaos, is exporting terrorism," Rutte described, without providing evidence of these series of claims.

Rutte tried a bit of flattery, which didn't exactly calm Trump's verbal attacks on NATO:

"I know there have been isolated cases about which you are really disappointed, but generally speaking your European allies have been there," Rutte said.

Trump appeared unconvinced, at times interrupting Rutte ​to disagree with him, though he praised his leadership.

"You really have done a good job, and I think if anybody else were in that position, we wouldn't even be meeting today, to be honest with you, because we were let down," Trump said.

Trump looks like he's barely able to stay awake while Rutte tries to butter him up pic.twitter.com/pjEOjBgvWr

— Aaron Rupar (@atrupar) June 24, 2026

Trump wasn't willing to let Rutte dodge:

“I know there have been debates about whether your allies in Europe were with you enough. I just want to say one thing,” Rutte said.

“They weren’t,” Trump interjected with a two-word comeback.

“Let me say one thing,” Rutte pleaded. “I know you think that [and] your irritation about that, but when you look at the numbers, 4,000- 5,000 US planes [took] off from bases in Europe in the six weeks this war took place.”

With props in hand, Rutte unveiled what he's calling the "Trump trillion"...

WATCH: NATO Secretary General Mark Rutte unveils what he calls the "Trump trillion" as he credits President Trump with helping push European allies to boost defense spending.

Rutte said Europe and Canada have added roughly $1.2 trillion in defense spending since Trump first… pic.twitter.com/IpS5RhNgEs

— Fox News (@FoxNews) June 24, 2026

In a couple weeks, July 7, is when the big annual NATO summit is slated to begin in Ankara, Turkey. The timing of Turkey hosting the gathering is interesting, given the country has been opposed to the US attacks on Iran, and has become a top regional enemy of Israel, with the two sides having issued heated and threated rhetoric for months.

Turkey is another US ally which is not going to lift a finger to assist the US in the Gulf area, but in terms of the pending peace deal with Tehran, and the prior signing of the Memorandum of Understanding (MoU), there is broad support.

Tyler Durden Thu, 06/25/2026 - 14:20

US Sees Record Q1 2026 Energy Storage Installations

By Brian Martucci of UtilityDive

The United States added 3.3 GW/8.4 GWh of energy storage in the first quarter of 2026, according to the latest figures from Wood Mackenzie and the American Clean Power Association. All three segments — utility-scale, residential and commercial/community/industrial — notched records for the seasonally slow first quarter.

The London-based energy consultancy and U.S. clean energy trade association see cumulative installed U.S. energy storage capacity reaching 200 GW/655 GWh by 2031, a four-fold increase from today. The forecast is consistent with a separate outlook from the U.S. Energy Information Administration that sees U.S. energy storage capacity doubling by the end of 2027.

The quarterly update to Wood Mackenzie/ACP’s U.S. Energy Storage Monitor expects favorable tax policy and large-load demand for colocated and behind-the-meter storage to lift installation volumes over the next several years, as U.S. battery manufacturing capacity grows.

Both Wood Mackenzie/ACP’s Q1 2026 U.S. Energy Storage Monitor and the EIA’s June 2026 Short-Term Energy Outlook hint at strong near- and medium-term fundamentals for the U.S. battery energy storage industry.

The EIA expects U.S. electricity consumption to rise by 76 billion kWh in 2026 and 126 billion kWh in 2027, driven largely by increased sales to commercial, industrial and transportation users. 

A battery energy storage facility. The United States added 3.3 GW/8.4 GWh of energy storage in the first quarter of 2026, according to a June report from Wood Mackenzie and the American Clean Power Association

In 2026, above-average summer temperatures across much of the U.S. will boost electricity demand to the benefit of renewables, which the EIA expects to “almost entirely” meet the increase in demand. Solar generation could rise 19% and wind generation 10% this year, the EIA said.

Solar and battery deployments, often paired at the same site, continue to dominate new generation deployments in the U.S. Solar and storage accounted for 91% of nameplate generating capacity added in the first quarter of 2026, and nearly 50% of new residential solar systems were paired with batteries during the same period, according to a June 10 report from the U.S. Solar Energy Industries Association.

One key factor behind the U.S. battery boom is the preservation of the federal investment tax credit for qualifying energy storage systems, Wood Mackenzie and ACP said. The Inflation Reduction Act first authorized those credits, which can offset 30% or more of deployment costs, in 2022. Last year, the One Big Beautiful Bill Act preserved the energy storage ITC even as it accelerated the expiration of corresponding investment and production tax credits for wind and solar systems.

WoodMac/ACP expect utility-scale storage to claim 85% of capacity additions through 2031 as large-load customers ink colocation and capacity contracts with energy storage providers. 

The commercial/community/industrial segment will grow 26% through 2031 amid strong behind-the-meter demand in California and at least 215 MW of community-scale storage projects in the works nationally, WoodMac and ACP said. And after a shallow contraction in 2026 following a rush of installations ahead of the expiration of the Section 25D tax credit at the end of last year, the residential storage segment will expand at a 12% average annual pace over the next four years, the organizations said.

Spurred by tax-code changes that benefit energy storage systems with more U.S.-sourced content, domestic battery manufacturing is ramping up to meet expected demand. 

The Energy Storage Coalition, an industry group, said in March that U.S. factories now have enough capacity to supply 100% of domestic demand. Some of that capacity is coming from manufacturers that previously planned to make electric vehicle batteries in the United States. Ford and General Motors, for example, both announced significant energy storage investments this year.

Tyler Durden Thu, 06/25/2026 - 14:00

Xbox Hits Gamers With Price-Hike As Major Retailer Warns Console Shortage Looms Ahead Of GTA VI Launch

Two reports hit on Thursday that could upset gamers ahead of the release of Grand Theft Auto VI. 

First, a major retailer warned that console shortages could emerge as demand for PlayStation 5 and Xbox Series X/S hardware collides with a memory chip shortage. Then The Verge reported that Xbox consoles are set for another price hike, adding another pain point for gamers months before one of the most anticipated video game releases in over a decade. 

Video game industry publication The Game Business reported Thursday that the ongoing hardware component shortage, better known as the chip shortage, could spark a supply crunch for popular gaming consoles at major retailers in the coming months.

Here's what the outlet reported:

But a senior games buyer, speaking without the permission of his employer, told us: "We've been informed that because of the on-going issues around hardware component availability, we won't be getting the units we want ahead of GTA."

He added: "Demand will likely outstrip supply during the year end period."

The outlet continued:

We've contacted PlayStation and Xbox about the claim. Sony CEO Hiroki Totoki told investors in May that "for calendar year 2026, the necessary volume has been secured"

However, Xbox Chief Strategy Officer Matthew Ball told The Game Business earlier in the month that there are already supply issues.

"I can tell you definitively demand for our console exceeds the supply," he told us. "We are putting them in as many stores as possible. We are producing them as quickly as possible. There is a severe limitation to how quickly we can do that, but it's not a question of appetite. We need to do more, but there are constraints here. And so there are, unfortunately, a number of different markets in which we do not have supply. There are other markets in which we have inadequate supply. That is a privilege as a company it is a challenge for us to figure out."

When we asked about the potential impact of Grand Theft Auto 6, he said: "It's going to invigorate a lot of players. It's going to move some additional devices."

Separately, The Verge reports that Microsoft is hiking Xbox console prices again, startingAugust 11, with 512GB models increasing by $100 and 1TB models rising by $150. The price hike now means the Xbox Series S starts at around $499.99, while the disc-less Xbox Series X starts at $749.99 and the disc-drive version at $799.99. 

"Last October, we increased XBOX console price by $20-$70 in the U.S.," Microsoft wrote in a blog post.

The post continued, “We hoped another price increase would not be necessary, and we have spent the last several months working with suppliers on options. Unfortunately, console storage and memory prices have increased by more than 2.5x and we expect another doubling by the fall of 2027. The entire consumer electronics industry is struggling with the current components crisis, but the effects are particularly hard on consoles. Unlike phones, computers, speakers, and other consumer devices, consoles are typically not sold at a profit, but instead for less than they cost to make."

Earlier today, Take-Two Interactive's Rockstar Games studio officially launched the long-awaited pre-orders for Grand Theft Auto VI. The action-packed game is priced at $79.99 and is scheNovember 19unch on November 19 for PlayStation 5 and Xbox Series X|S.

The last major GTA release was GTA V,September 17hed on September 17, 2013. Gamers have been waiting 13 years for a major GTA installment, which only suggests massive demand for the game, and will likely coincide with demand for gaming consoles at the worst possible time - a memory chip shortage.

Google search trends for "pre-order Grand Theft Auto" are at their highest level since the GTA V release in 2013.

We provided readers with Wall Street commentary - from Raymond James to BTIG to Goldman analysts - discussing what their desks think of TTWO ahead of the fall release. Read the note here.

New development:

• Apple Price Shock: Macs And iPads Jump $200 Or More As Memory Crisis Worsens

It probably makes sense for gamers to front-run potential supply issues that could materialize later this year, especially given that the memory-chip shortage is not expected to ease anytime soon.

Tyler Durden Thu, 06/25/2026 - 13:40

Average 7Y Auction Stops On The Screws As Foreign Demand Slides

After a solid 2Y auction and a subpar 5Y auction earlier this week, moments ago we got the week's final Treasury issuance when the US auctioned off $44BN in 7Y paper in a perfectly average sale.

Starting at the top, the bond priced at a high yield  of 4.260%, down modestly from 4.290% last month and in the middle of a range established in late-2023 after which the 7Y has traded between 3.50% and 5%. The auction also priced on the screws with the When Issued which was also at 4.260. 

The bid to cover was 2.498, just under last month's 2.516 and on top of the 6-auction average of 2.488%.

The internals were a bit weaker: after Indirect bidders took down a record 78.4% in May, today their demand crashed to earth and foreign buyers ended up taking down just 57.55%, the lowest since Sept 26. And with Directs taking down 29.7%, a big jump from 11.2% in May but in line with the recent average, Dealers were left holding 12.75%, up from 10.42% a month ago and the highest since November.

Overall, this was a average-to-weak auction, with sufficiently good metrics even if the internals were a bit on the weak side. Not that the market cared (about this, or anything else); with 10Y yields extending their drop all day today, the meh auction barely registered. 

 

Tyler Durden Thu, 06/25/2026 - 13:24

Obama-Appointed Federal Judge Blocks Trump's EO Requiring Proof Of Citizenship To Vote

Via American Greatness,

A federal judge on Wednesday permanently blocked key portions of President Donald Trump’s executive order overhauling federal election procedures, ruling that the president exceeded his constitutional authority by attempting to impose new voting requirements without congressional approval.

U.S. District Judge Denise Casper, an appointee of former President Barack Obama, concluded that the Constitution gives primary authority over elections to the states and Congress, not the executive branch.

The ruling makes permanent a preliminary injunction Casper issued last year in a lawsuit filed by Democratic attorneys general from 19 states.

“While the Constitution vests the President with ‘executive Power’ and commands him to ‘take Care that the Laws be faithfully executed,’ it does not grant the President any specific powers over elections,” Casper wrote.

“As a result, the President ‘plays no direct role in the process of appointing electors,’ nor does he have authority to control the state officials who do,” she added.

Trump’s executive order sought to require documentary proof of U.S. citizenship to register to vote, prohibit states from counting mail ballots received after Election Day even if postmarked on time, and withhold certain federal funds from states that declined to comply.

Casper ruled that the administration lacked the authority to impose those changes through executive action.

In her 59-page opinion, the judge also rejected the administration’s justification for the order, writing that the Justice Department failed to establish the widespread election problems it cited in defending the policy.

“There is no evidence in this record of widespread ‘illegal voting, discrimination, fraud, and other forms of malfeasance and error’ within American elections, which the Executive Order purports to safeguard against,” Casper wrote.

The judge also concluded that the order would have disenfranchised thousands of voters.

The decision is another legal setback for the administration’s efforts to repair federal election procedures. Courts have repeatedly blocked or limited several election-related initiatives advanced during Trump’s second term.

Additional lawsuits are challenging a separate executive order aimed at creating a nationwide voter database and tightening mail voting requirements. Earlier this week, another federal judge blocked the administration’s attempt to use an immigration database to verify voter rolls, while courts have also rejected Justice Department efforts to obtain state voter registration records.

Despite the court rulings, Trump has continued urging Congress to enact proof-of-citizenship requirements through legislation.

The Republican-backed SAVE America Act passed the House but remains stalled in the Senate.

Trump renewed that effort Wednesday, saying he would withhold his signature from a bipartisan housing bill until Congress approves voter citizenship verification requirements.

Tyler Durden Thu, 06/25/2026 - 13:20

A River In Egypt

By Molly Schwartz, cross-asset strategist at Rabobank

A river in Egypt

Scott Bessent took to CNBC’s Squawk Box yesterday to opine on the situation with Iran. Bessent echoed Trump’s comments that any released Iranian assets are to remain under US Treasury oversight and are restricted to use for food and medicine. However, money is fungible, and any released cash that is used to help civilians may mean more cash from other places that can be used to support the IRGC’s interests

Bessent’s comments also called attention to another philosophical outlook on the war and the Administration’s initially stated— though seemingly not truly intended—goal of regime change. This is where the waters gets murky, and where we can climb into our Felucca and begin our journey along a river in Egypt, drifting, perhaps, into a bit of strategic “denial” about what regime change actually means. If, hypothetically of course, Operation Epic Fury succeeded in asserting regime change in Iran, where does the US go from here? If the new Ayatollah says he is willing to table plans of further enriching uranium and wants to align itself with US interests, should the US just keep firing missiles? Do you keep Iranian assets under lock and key, even if the regime has shown you that it has changed?

.@SecScottBessent: "Dollar dominance is essential, and everything @POTUS is doing here — if you look, the new Venezuela... the dollar is going to be the centerpiece of their trade... We're seeing in the Iranian negotiations, the Iranians will be invoicing in dollars. Everything… pic.twitter.com/5IsPYo8aSh

— Rapid Response 47 (@RapidResponse47) June 24, 2026

Bessent said himself, “we didn’t have a regime change, but we have changed the regime.” If that is the genuine perspective of the Trump Administration, then the deal may not be as bad for the US as many perceive it to be. As our Global Strategist, Michael Every, has noted on multiple occasions, show of strength means everything in the arena of Middle Eastern geopolitics. There is a possibility that the current hardliners in the IRGC aren’t actually so hardline anymore, but are only presenting as such. Note that this is not a new base case for our outlook by any means (you can read more about our Hormuz outlook here), but food for thought.

If the regime truly has changed, this also could have big implications for USD dominance. Bessent noted that a born-again Venezuela is shifting back towards USD invoicing, and that post-deal Iran is likely to do so as well.

Brent crude oil fell below $75/bbl for the first time since the war in Iran began, sending US Treasury markets into a tailspin. US 2-year yields dropped almost 6bp to 4.21, while the 10-year sunk almost 10bp—the largest one-day downward move since October 2025. With “peace in the Middle East,” the case for hikes is losing water by the day, with the market now pricing in 27bp worth of hikes by October, and only 40bp worth of hikes at the peak—a significant downgrade from Monday, when two full hikes had been priced in by the April 2027 FOMC decision.

Such a dramatic move in rates would normally suggest a weaker dollar, but USD was actually the best-performing G10 currency on a one-day view and the best month-to-date. The DXY index continued its climb from last week’s FOMC meeting to 101.6—the highest level since May 2025. Meanwhile, EUR/USD broke below crucial support at 1.14, fueling additional EUR selling, with the pair trading at 1.1356 at the time of writing. While the following appears to be more of an instance of correlation rather than causation, it is also important to note that yesterday’s move coincided with comments from Bessent—perhaps another slow turn of the Felucca—that USD can remain strong even when interest rates are being cut.

While USD is soaring, JPY is plummeting. USD/JPY spent the day yesterday approaching the July 3, 2024 high of 162, with the 14D RSI at 71.83 suggesting that USD/JPY is overbought. According to Bloomberg, Bessent and Japanese Finance Minister Katayama spoke over the phone, with Katayama telling reporters that “she and Bessent agreed to take ‘bold’ steps on currencies if needed,” and said the nations are increasingly “aligned” on foreign-exchange policy.

The Bank of Canada released its Summary of Deliberations from the June 10 decision, written on papyrus. Recent Canadian economic data suggest that the Canadian economy has slipped into a technical recession, with two consecutive quarters of negative quarterly growth. The Governing Council piled into a felucca of their own, racing up de Nile, justifying that higher-frequency data suggest a “resumption of growth in the second quarter,” and that while the Canadian economy is weak, it is “not clearly in a recession.”

Tyler Durden Thu, 06/25/2026 - 12:40

French Navy Boards 5th Russian 'Shadow Fleet' Vessel Off Europe Since September

French President Emmanuel Macron has announced yet another highly provocative naval seizure of a Russian so-called shadow fleet vessel. 

"On Tuesday, the French navy boarded the oil tanker Deliver as it was passing off the coast of Sicily in breach of maritime law," Macron wrote in a post on X, revealing the prior interdiction that took place earlier in the week.

Illustrative, via French Navy

Reports say it flew a Cameroonian flag and was sailing from Russia's Baltic port of Primorsk, whereupon it was boarded by French forces over a falsified registration, according to the French maritime prefecture.

France's navy escorted then the tanker to an anchorage location, where it was subject to deeper inspections my maritime authorities.

It marks no less than the fifth such boarding of a 'shadow fleet' vessel suspected of transiting sanctioned Russian goods or energy off a European coastline since September.

"We will not allow the 'shadow fleet' to circumvent sanctions and finance Russia's war effort," Macron said.

The apparent legal justification France's navy has relied on for such actions is the practice of "flag-hopping" - which involves a crew repeatedly changing displayed flags, along with often invalid registrations to thwart international tracking monitors.

The last several seized tankers were also flying flags of African nations, and these interdictions have stretched back through last year. 

France's military released footage of the boarding of the 'Delivery'...

French President Emmanuel Macron has announced that the French military intercepted the Russian "shadow fleet" tanker 'Deliver' on Tuesday as it transited off the coast of Sicily in violation of maritime law. pic.twitter.com/T3sE95BrT1

— OSINTdefender (@sentdefender) June 25, 2026

In some instances, Russia has been sending military escorts - which of course has seen French and European militaries hold off executing any action.

As a result of this latest intercept, it's likely Russia's navy will increase its military escorts, which has been more common in northern European waters, given the proximity to Russia.

Tyler Durden Thu, 06/25/2026 - 12:20

Trump Singles Out Exxon, Chevron, Shell, And BP Over High Gas Prices

By Irina Slav for OilPrice.com

President Donald Trump has listed Exxon, Chevron, Shell, and BP as being among companies responsible for excessively high fuel prices, following the announcement of a federal government probe into price-gouging earlier in the week.

“Oil prices have come down so much and we are not seeing anything at the pump by comparison the way they should be,” the U.S. president told media, as quoted by the BBC. “We should be, in my opinion, at $2.25 [a gallon] right now at the pump and we are higher than that.”

The U.S. national average for a gallon of regular gasoline was $3.928 as of Wednesday, down from $4.0250 a week ago, but up from $3.2240 a year ago, according to AAA data. GasBuddy reported a national average of $3.85 per gallon as of Monday. Still, fuel prices have been on a decline for six weeks in a row, with diesel also dipping below $5 per gallon for the first time in weeks, bringing relief to industrial fuel consumers.

“The big Oil Companies are not dropping their price at the pump commensurate with the sharply lower prices they are paying for Oil. Those prices are dropping ‌like a rock! In other words, customers are being "gouged",” Trump wrote on TruthSocial late on Tuesday. “I have instructed the DOJ to immediately start looking into this. Gasoline prices better start going down a lot faster than what I’m seeing!” the U.S. president also wrote.

In response, the American Petroleum Institute said that retail fuel prices “don't move in lockstep with crude oil”. “Our industry shares the goal of delivering relief at the pump and restoring stability to global energy markets,” API spokeswoman Bethany Williams also said.

“President Trump was clear all along that there would be short-term, temporary disruptions to energy markets, and that oil and gas prices will quickly fall as soon as the Iran situation is resolved,” a White House spokesperson told media, as quoted by the BBC.

Tyler Durden Thu, 06/25/2026 - 12:00

Supreme Court Allows Trump Admin To Remove Deportation Protections For Syrians & Haitians

Authored by Sam Dorman via The Epoch Times,

The Supreme Court has allowed the Department of Homeland Security’s (DHS’s) attempt to remove deportation protections for nationals of Haiti and Syria.

In a 6–3 decision on June 25, a majority of the court said federal law barred judicial review of non-constitutional arguments against the department’s determinations.

Justice Samuel Alito wrote the majority opinion, which said the sole constitutional argument in the case would likely fail.

“Citing statements made by President Trump and former Secretary of Homeland Security Kristi Noem, one set of respondents advances an equal protection claim that Haiti’s TPS [Temporary Protected Status] designation was terminated because of the racial makeup of that country’s population,” Alito wrote.

“But, ironically, one of respondents’ other arguments undermines the equal protection claim by offering a strong, race-neutral explanation for Haiti’s termination: namely, that the current administration, which has terminated every TPS designation that has come up for renewal, simply opposes the TPS program, at least as it has been implemented in the past.”

During oral argument in April, the Justice Department argued that lower court judges had exceeded their authority in blocking DHS’s decisions to terminate protected status for those groups.

Some of the arguments focused on a portion of the Immigration and Nationality Act that says, “There is no judicial review of any determination of the [DHS Secretary] with respect to the designation, or termination or extension of a designation, of a foreign state under this subsection.”

The decision is expected to impact thousands of Haitians and Syrians who received temporary protected status.

Developing...

Tyler Durden Thu, 06/25/2026 - 11:25

75% Of US GDP Growth In The First Quarter Was Due To AI

On the surface, today's final revision (aka 3rd estimate) of the US Q1 GDP print was unremarkable: Real GDP grew 2.1% annualized in the first quarter, a reversal of last month's downward revision of 1.6%, but back to where the original print was when it was reported in April, when the BEA reported 2.0% growth. 

The print reflected a downward revision to imports, which are a subtraction in the calculation of GDP, that was partly offset by a sharp downward revision to consumer spending.

Taking a closer look at the components, net exports contribution being revised sharply higher to -0.4% from -1.3% previously drove the improvement while consumption was much weaker. Real personal consumption expenditures revised sharply lower to 0.5% (saar) from 1.4% (saar). This is unexpected as virtually everyone was convinced that bumper tax rebates from Trump's OBBBA "stimulus" would push Q1 personal spending; in retrospect, spending in Q1 was far weaker than expected. 

That said, real spending in May climbed 0.3% (3.2% annualized), while April was revised to 0% from 0.1%. This suggests an okay pace of spending but not boomy across the two months (1.6% annualized) considering bumper tax refunds putting extra money in people's pockets. 

Yet, as before, when we get to fixed investment, something remarkable emerges: Residential housing investment declined 1.7% and subtracted 0.3% from the bottom line GDP print. This was the 5th consecutive decline as residential investment has declined, and 7th of the past 8 quarters. To be expected at a time of rising interest rates. 

But Nonresidential fixed investment was the outlier, soaring by 8%, and responsible for 1.42% of the 2.1% bottom line print.

Let's take a closer look at the breakdown.

The chart below shows quarterly annualized GDP growth broken down by components. It shows that Q1 GDP grew at exactly 2.100% in Q1. Also notable is that traditionally strong consumption, added just 0.37% of the bottom line number, as per the discussion above; this was offset by net trade being a far smaller detractor from GDP growth at -0.37% with, inventories (0.23%) and government (0.74%) providing a modest offset. 

The highlighted block is Fixed Investment, which contributed 1.11%. However, keep in mind that residential fixed investment subtracted 0.30% from the total number, which means that Nonresidential fixed investment was responsible for 1.42% of the 2.1% GDP print.

Focusing on the fixed investment component, we find the following: as noted above, it was all about non-residential fixed investment.

Zooming into this segment, we find that Nonresidential equipment grew by 5.8%, or contributing 0.8% to the 2.1% GDP, while Intellectual Property products grew just over 5.3%, and added 0.74% to the bottom line GDP. 

While IP is clear - it consists primarily of Software, the kind that one uses to create and develop AI tools, as well as R&D - the components behind Nonresidential equipment need a closer look again, and here we find that Information Processing equipment, i.e., data centers, grew at a stunning 14%, comprising virtually all of the 0.81% contribution to 2.1% GDP growth.

And there you have it: between Software (0.74% of the GDP growth) and Nonresidential Equipment (0.81%), AI - which was the primary driver behind growth in both - contributed just over 1.5% to GDP growth of 2.1%; in other words about 74% of all US growth in Q1 was due to AI.

Another way to visualize the remarkable impact of spending on "computers" is the chart below: it clearly shows just how reliant the US has become on spending on computer products.

And that's why AI is now not only a market bubble, but it has become a core anchor propping up the entire US economy; it's also why the US government will have no choice but to backstop it once the inevitable AI bubble pops. 

Tyler Durden Thu, 06/25/2026 - 11:10

Bayer Stock Soars After Supreme Court Guts Core Legal Theory Behind 1000s Of Roundup Cases

Bayer AG shares soared in Frankfurt on Thursday morning after the Supreme Court sided with the German pharmaceutical and life sciences giant in a major Roundup ruling expected to block thousands of lawsuits alleging it failed to warn consumers that the weedkiller could cause cancer.

Bloomberg reported that the Supreme Court voted 7 - 2 to throw out a $1.25 million jury verdict won by Missouri resident John Durnell, who blamed years of Roundup exposure for his non-Hodgkin's lymphoma.

The first opinion is in Monsanto v. Durnell. The court holds that the federal law governing pesticide labels bars a lawsuit against Monsanto, the maker of Roundup weedkiller, for failing to include a warning on the label about the risks of cancer.https://t.co/cPzdF5lgH5

— SCOTUSblog (@SCOTUSblog) June 25, 2026

Justice Brett Kavanaugh wrote for the majority that federal law "demands" uniform pesticide labels and that the state-law "failure-to-warn" claim at issue in the case "would require a cancer warning on Roundup's label, a requirement 'in addition to' and 'different from' the label required by EPA."

Justices Ketanji Brown Jackson and Neil Gorsuch dissented.

NEWS: The Supreme Court just gutted the central legal theory behind tens of thousands of Roundup cancer lawsuits.

In a 7-2 ruling in Monsanto v. Durnell, the justices held that federal pesticide law preempts state "failure-to-warn" claims, meaning a jury can't punish Bayer-owned… pic.twitter.com/zrIsgJDBu5

— Benjamin Ryan (@benryanwriter) June 25, 2026

The ruling is a major milestone in Bayer's years-long court battle over Roundup, which it acquired from Monsanto for $63 billion in 2018. The company has since stopped using glyphosate in Roundup products sold at major retailers.

Earlier this year, Bayer announced a proposed $7.25 billion class action settlement to resolve tens of thousands of current and future lawsuits.

Shares of Bayer soared 20%...

...marking the largest intraday gain since March 2003.

Bloomberg Intelligence analyst Holly Froum wrote in a note before the high court ruling that about $787 million in existing Roundup verdicts could be affected by the decision.

To sum up, the high court ruled that consumers cannot sue Bayer over the absence of a cancer warning on Roundup labels because federal regulators had already concluded that such a warning was not required.

Tyler Durden Thu, 06/25/2026 - 10:55

Bitcoin Tumbles As Strategy Slammed, Faces Massive $10 Billion Option Expiry

Moments after the cash market opened, bitcoin plunged almost $3,000 in a matter of seconds to $58,000, on no news, sending the price to the lowest level since Sept 2024. 

This was a strange move for bitcoin because while stocks do tend to move rapidly at cash open as that's when options restart trading (as we have noted, in recent months most investors are trading almost exclusively in options and avoiding the underlying securities completely), bitcoin trades within its own ecosystem that is open 24/7 and is - or rather should be - far less reliant on key stock market time triggers. 

Instead, the trigger for the drop was not bitcoin but rather its biggest treasury sponsor, Strategy, which plunged as much as 8% in what now appears to be a coordinated effort to send MSTR stock sharply lower using puts (hence the move at exactly 9:30am when option trading started), which in turn has led to lower prices on its various tranches of perpetual preferred stocks, and ultimately, lead to more bitcoin selling on fears Michael Saylor will have to sell even more bitcoin. 

However, today it's not just MSTR that is depressing bitcoin: the largest cryptocurrency is facing a massive options expiry that risks putting more pressure on a market already struggling with fading institutional demand and macroeconomic headwinds.

According to Bloomberg, about $10 billion of notional value in Bitcoin options is set to expire on Deribit, the largest crypto options venue, at 4 p.m. Friday in Singapore. Because most of those options are bullish bets and Bitcoin has been falling, there’s potential for traders to turn defensive or outright bearish. 

“This is a book that has been positioned for higher prices over the medium term, now being marked against a spot that has slipped,” said Jean-David Pequignot, chief commercial officer at Deribit. “The consensus long-call positioning has drifted offside.” 

After dipping as low as $58K, the lowest level in almost 2 years, bitcoin was trading below its 200-week moving average, a technical level that can signal a prolonged bear market.

The Bitcoin options expiring on Deribit represent about 37% of open interest, with the ratio of puts to calls at 0.83, according to Pequignot, indicating more bets are on Bitcoin appreciating. 

The bulk of call open interest is now out of the money, meaning the contracts have no intrinsic value at current prices. Puts, by contrast, are clustered around $60,000 to $65,000 and $70,000 to $75,000, and mostly in the money.

Of course, just because there is a big expiry doesn't mean more selling is guaranteed: “expiry mechanics clear positioning; they do not set direction,” said Adam Haeems, head of asset management at Tesseract Group. But the key issue is still a call-skewed market falling into thin quarter-end and summer liquidity, he said.

“Thin books plus a concentrated expiry mean Friday’s move likely overshoots in whichever direction flow tips first, then mean-reverts once dealer hedging unwinds,” Haeems said. If dealers finds themselves in a sharp negative gamma position, then any subsequent moves in bitcoin will be significantly amplified. 

Any sharp move around expiry may say more about positioning than a lasting shift in trend. Haeems said the more important test will come in the first full week of July, after the quarterly book has cleared and leverage has been reduced.

Meanwhile, the flow picture continues to deteriorate as US-listed Bitcoin funds posted almost $3 billion of net outflows in June so far, and that ignores the relentless pressure on Michael Saylor's Strategy and its various tranches preferred securities.

Griffin Ardern, co-founder of Primal Fund, said option traders’ longer-dated bearish bias toward Bitcoin has intensified, while hawkish Federal Reserve commentary and elevated Treasury yields suggest investors are pricing in tighter liquidity.

“Under conditions of contracting liquidity, BTC typically does not fare so well,” he said.
 

Tyler Durden Thu, 06/25/2026 - 10:40

A Golden Opportunity Just Appeared

Authored by Matt Badiali via DailyReckoning.com,

The headlines are screaming that gold is falling.

And it’s true. The price dipped below $4,000 per ounce for the first time since November 2025.

This seems backward. There are multiple wars going on in the world. Fuel prices are high. Gold is supposed to be the “safe haven” asset. Why isn’t it going up?

Well, as analysts from LPL Financial, the largest broker-dealer in the U.S. said, gold is doing what it’s supposed to do. It’s acting as financial insurance.

Analysts at giant bank, Goldman Sachs estimated that if the war lasted into April, it would cause economic contractions.

• UAE: -3%

• Saudi Arabia: -5%

• Kuwait/Qatar: -14%

• Iran: -15% (IMF estimate)

In addition, countries like Egypt, Tunisia, Iraq, and Turkey have fragile economies. They can’t afford to have fuel costs spikes.

Because oil is priced in dollars, something these countries don’t have enough of, higher prices create severe economic disruptions.

Turkey faced soaring inflation due to high fuel costs. The country’s central bank sold gold to offset the impact. Turkey sold $3 billion’ worth of gold in a single week in March.

This is gold as an insurance policy. When your economy runs on oil exports that don’t get delivered or you can’t afford the soaring fuel prices, you cash in your insurance policy…gold.

That’s what’s going on in many countries today. Instead of storing value, gold is sold to create liquidity.

And so much of it got sold that it pushed the price down nearly 35%.

And as you would expect, falling gold prices are sending shock waves through the mining industry. As you can see below, the VanEck Gold Miners ETF (GDX) is down nearly 35% since March 2026:

This is a combination of falling gold prices and investors taking profits. From January 2025 to March 2026, GDX rose 240%. That’s a lot of profit to be cashed in. And investors are taking that money off the table.

That’s good news for gold investors because it will create buying opportunities. These gold miners still make a ton of money. So, the price to earnings ratios are even lower now than before.

But I have my eye on the development projects. And as gold prices fall, it will send those stocks down even further. These are the companies building new mines. They have no revenue and need money to build their mines. For many analysts, that presents too much risk.

But to me, that’s an opportunity. Remember, all the current mines are running out of metal. They need to replace them with new mines. That’s why the development projects are so valuable. And they don’t lose their long-term value because of a short-term dip in the gold price.

And make no mistake, this dip won’t last long. It took massive selling to push it down this far. I expect to see a huge rebound soon, as those sales trickle down.

For those of you who love gold, this is an opportunity to add physical at a great price. For those of you who like speculations, the gold stocks are ripe for the taking. Use this dip to add to your positions or build a whole new portfolio.

You don’t get these opportunities often. Recognize this one and use it to make some money.

Tyler Durden Thu, 06/25/2026 - 10:20

Afghan Asylum Seeker Sentenced For Raping Goats And 6-Month-Old Lamb

Via Remix News,

A 19-year-old Afghan man, Massoud S., was tried Monday at the Aix-en-Provence court for sexual assault against six goats, one of which died, and a 6-month-old lamb at an educational farm. He has been convicted and sentenced to 30 months in prison and a ban from French territory.

Afghan migrant Massoud S. was initially charged with “serious abuse or act of cruelty against a domestic, tame, or captive animal.” He continued to deny the rapes in this case despite DNA evidence and being caught redhanded raping a goat. He even told a court psychologist that anyone who did rape the animals only did it to “not rape a woman” since “a goat could not identify him afterward.”

The sexual assaults occurred between February and April and on top of the DNA evidence, his phone location also had him pinged to the crime scene.

“I don’t know how to explain it,” he told the magistrates regarding the ample evidence against him.

Massoud S. reportedly repeatedly raped the animals, which all belonged to an animal shelter and educational farm “Un moment” in Les Pennes-Mirabeau, near Marseille.

Cassandra Sortino, the owner of the establishment, remains deeply traumatized by the mass rape of her animals by the Afghan man.

“We set up this association to do good, and the animals were in danger in our own structure. We cannot explain it morally,” she testified. “We feel like we failed.”

According to Swiss outlet 20 Minutes, “Representing herself without a lawyer, she searched in vain for an answer to her central question: why?”

The incident began in February when she noticed that there were ligature marks on some of the animals’ legs. A veterinarian discovered injuries to the animals’ genitals and traces of blood.

This was enough evidence for Sortino to install a surveillance camera, where she saw a man sneaking into her property and raping animals. She remained in contact with police, and in April, the Afghan man was finally arrested. At the moment he was apprehended, police discovered the man in the middle of the act of raping the goat, wearing latex gloves, and with his pants down.

Massoud S. claimed that he was in the barn because he missed his train on the night he was arrested to Marseille, where he lives in an asylum seeker center in the city’s 3rd arrondissement.

Massoud S. required a translator during his trial but said he felt “full of shame” when describing his strict religious upbringing. He arrived in France in November 2025 and claims he lost his family during a bombing raid in his home country.

A psychiatrist reported the man suffers from no mental disorders, however, he reportedly said while talking about the rapes: “We make a big deal out of it when they’re just animals,”

“I’m a normal person,” he said when confronted with these statements in court.

He has been sentenced to 30 months in prison for charges reclassified as “abuse leading to death.” He is also banned from French territory and must register into a database for sexual offenders.

Sortino is not done with the Afghan and plans to appeal the sentence.

“I would have liked to understand,” Sortino said.

Previous cases

Last year in Germany, a shocking case has emerged from the beautiful town of Oberneufnach in Bavaria, which involved a 52-year-old Turkish asylum seeker allegedly breaking into a stable and sexually abusing ponies.

The man, who is from a refugee shelter in the nearby town of Anhofen, was arrested after he was caught on surveillance video.

The man broke into the horse farm at 6:45 p.m. while the family was having dinner. They heard the dog barking and then looked on surveillance monitors, where they saw the man in the stable with his pants down on top of one of the animals.

The boyfriend then ran to the stables to chase down the man, but he had already fled the scene. He continued his pursuit of the suspect though and eventually caught him. Police arrived and placed the man under arrest.

In 2023, a 27-year-old suspect was arrested after he was caught on a surveillance camera raping a pony at a stable south of Hamburg. The 18-year-old pony, which is named “Carrie,” was abused by the man at 1 a.m., with footage showing the man calmly walking onto the property and starting to attack the defenseless animal.

Steffi B. released the footage to German newspaper Bild, which posted stills of the perpetrator on its web publication.

The attack happened in Birkenmoor, which is in Harburg, just a few kilometers from the Hamburg city center.

Even the petting zoo at the park has not been safe. In 2017, a Syrian migrant raped a pony there in front of children.

“My babysitter was out with our son in Görlitzer Park. They witnessed the man sexually assault the pony,” one woman told Berliner Morgenpost at the time. The babysitter took a photo of the man as he raped the pony and provided it to police. The migrant was banned from the petting zoo in response, but it is unclear if he was ever charged by police.

Read more here...

Tyler Durden Thu, 06/25/2026 - 09:15

Trump Requests $88 Billion Supplemental Funding Package Focused On Iran War Funds, Farm Aid, And Ebola Response

President Donald Trump formally asked Congress on Wednesday for $87.6 billion in supplemental appropriations - your tax dollars (for our American readers) - to cover urgent needs stemming from the U.S. military campaign against Iran, provide economic relief to American farmers, and respond to the Ebola outbreak in Central Africa.

The request, sent in a letter to House Speaker Mike Johnson, comes as the administration seeks to replenish military stocks and address operational expenses from Operation Epic Fury, the joint U.S.-Israeli military effort launched on February 28, 2026.

Breakdown of the Funding Request

According to the White House letter and reporting from multiple outlets, the package allocates funds across several priorities:

• Department of War (Pentagon): $67.146 billion - the largest share. This includes approximately $21 billion for munitions to rebuild stockpiles, substantial funding for operations and readiness, $2.4 billion for drones, $5.1 billion for cybersecurity and autonomy, fuel costs, and $12.1 billion for classified programs.
• American Farmers (USDA): $11.1 billion - $10 billion in temporary economic assistance for row and specialty crops in 2026, plus $1.1 billion to help Florida agricultural producers recover from winter storm damage.
• Ebola Outbreak Response: $1.4 billion - focused on detection, contact tracing, surveillance, humanitarian assistance in the Democratic Republic of Congo, Uganda, and Kenya, plus medical evacuation and departure support for U.S. citizens.
• Infrastructure and Other: $500 million for restoration and capital projects in Washington, D.C.; $1 billion toward modernizing Penn Station in New York City; plus smaller amounts for the Department of Energy and other items.

The administration described most of the request as addressing “urgent needs related to Operation Epic Fury” while also tackling other critical domestic and international priorities.

Background: Operation Epic Fury

Operation Epic Fury - the Israeli-US (Master-Blaster) war on Iran which has split the Republican party in exchange for no obvious benefit to Americans who are on the hook for tens of billions of dollars - saw four months of intense fighting from late February to early May 2026. The goal was to destroy Iran’s ballistic missile capabilities, missile and drone production facilities, navy, air defenses, and efforts to develop or acquire nuclear weapons and related technology.

Diplomatic efforts continue, including a June 2026 memorandum of understanding signed in Islamabad aimed at formally ending the conflict within a 60-day window, though disputes remain over issues such as IAEA access to damaged nuclear sites.

The Trump administration has characterized the campaign as a decisive success achieved through “peace through strength,” while critics have raised questions about costs, civilian casualties in some strikes, and broader strategic outcomes.

Political Reactions and Congressional Outlook

The supplemental faces a challenging path in Congress. It requires bipartisan support to advance in the Senate, where 60 votes are typically needed to overcome procedural hurdles.

• Democrats have largely opposed funding what many describe as an unnecessary or illegal war and are expected to resist the package.
• Republicans show divisions: Many support replenishing military capabilities and providing farm aid, but some express skepticism about the war’s handling and costs. Farm-state lawmakers are already signaling they may seek to increase the agricultural assistance beyond the proposed $11.1 billion.

House Republican leaders have indicated they will review the details carefully, citing Congress’s constitutional role in funding national defense. The request arrives amid broader debates over the administration’s push for a significantly larger Pentagon budget.

The package also includes regulatory updates favored by some farm-state Republicans, such as measures related to hemp-derived products and year-round sales of E15 ethanol-blended fuel. These provisions aim to support agricultural interests but have drawn opposition from other sectors.

Bundling military, humanitarian, agricultural, and infrastructure spending in one supplemental is a common legislative tactic but often draws criticism for obscuring priorities or adding unrelated items.

What Happens Next?

Congressional appropriators will now examine the request. Passage is far from guaranteed given partisan divides over the Iran conflict and competing budget priorities. The administration has urged swift action, emphasizing the need to restore military readiness and address other urgent matters.

This supplemental represents one of the largest emergency funding requests in recent years, reflecting both the scale of the military operation against Iran and the administration’s efforts to address domestic economic pressures on farmers and global health risks.

Tyler Durden Thu, 06/25/2026 - 09:00

Continuing Jobless Claims At 3-Month-Highs, Initial Claims Tumble Back To 2021 Levels

The number of Americans filing for unemployment benefits for the first time fell last week to 215k (after hitting four month highs last week), well below the 225k expectations and back to the same levels it was at in 2021...

New Jersey and Oregon saw the biggest WoW rise in initial jobless claims while Minnesota and Pennsylvania saw the biggest decline...

At the same time, continuing jobless claims picked up to 1.821 million Americans - the highest in 3 months...

The bottom line is that initial claims remain low by historical standards and continue to run below year-ago levels, reinforcing the more hawkish 'labor market is resilient' framework introduced last week.

Tyler Durden Thu, 06/25/2026 - 08:55

Services Costs Drag Fed's Favorite Inflation Signal To 3-Year Highs, Savings Rate Holds Near Lows

After accelerating in March and April, The Fed's favorite inflation indicator - Core PCE (a measure of price changes in consumer goods and services that excludes volatile food and energy costs) - was expected to rise once again in May.

And it did with the crucial inflation signal up 0.3% MoM (as expected) and up 3.4% YoY (as expected) and at the highest level since Nov 2023...

Services costs picked up again with Durable goods flat and non-durable goods inflation decelerating...

The headline PCE jumped 0.4% MoM (slightly less than the 0.5% exp) and up 4.1% YoY (as expected) - highest since April 2023...

The impact of the war is evident in crude prices and the PCE's energy index, but arguably, this is as bad as it gets in terms of inflation...

But PCE signals that the soaring cost of semiconductors (the software and accessories component receives about 30 times the weight in PCE as it does in CPI) - has stalled...

Higher prices were met with higher spending (+0.7% MoM notional) and higher income growth (+0.7% MoM)...

While Spending has been accelerating, income growth HAD been slowing but accelerated markedly last month...

...with both private sector and government workers seeing wage growth acceleration...

Spending continues to run well ahead of inflation (real personal spending up 2.1% YoY)...

Despite an upward revision to the personal savings rate every month of 2026, May was 3.0%, still lowest since 2022

With the savings rate barely above record lows, it seems that Americans are digging into their savings to keep up with inflation. No wonder sentiment is so low...

Howver, as Goldman's Rich Privorotsky notes, the challenge is that most inflation data now feels inherently backward looking, predating the collapse in oil back toward pre-conflict levels.

Given Warsh's new mantra of no forward guidance we probably should have more volatility around these releases than we have seen historically.

Tyler Durden Thu, 06/25/2026 - 08:45

Futures Jump As Micron Revives AI Euphoria, Oil Erases War Gains

Global stocks and S&P futures are higher while Nasdaq futures are on a tear after Micron’s sales forecast blew the lights out, brushing aside fears over a near-term pullback in the AI trade, while Qualcomm set aggressive targets at its investor day in New York. As of 8:00am ET, a revival of the AI demand theme is sending contracts on the Nasdaq 100 up 2.1% while S&P 500 futures are up a more modest 0.7%. MU is +18% pre-market, pushing Semis higher (SOXX +5%, DRAM +12%) while Mag7 - the companies which enable all this chip spending - are mostly lower. As Goldman's Delta 1 desks asks, how much longer will they be willing to see their stock languish while funding semiconductor outperformance? Korea's KOSPI rallied 5.5% overnight (closing well off the highs) and remains ~2.4% below pre-Flash Crash levels. While the AI theme is bid pre-market, this is not an ‘Everything Rally’ with Cyclicals seeing a mixed performance with Banks flat, Regional Banks lower, Energy down with crude, Discretionary mixed, and Materials flat. Within Defensives, Staples are weaker, HC mixed, and AI-related Utils names are higher. Brent crude dropped 1.4% to below $73 a barrel, erasing all Iran war gains, on fears of a supply glut following a ramp-up in flows through the Strait of Hormuz. Bond yields are flat to +2bp as the yield curve steepens, but the USD starts the session lower for the first time in 6 sessions. US economic data calendar includes May personal income/spending, 1Q GDP revision, May durable goods orders, weekly jobless claims and May Chicago Fed national activity index (8:30am) and June Kansas City Fed manufacturing activity (11am). Fed speaker slate includes Bowman (8:45am), Goolsbee (2pm, 6:30pm) and Williams (3:40pm).

In premarket trading, Micron is 16% higher premarket after its quarterly sales forecast blew past estimates; Qualcomm is up 12% after it estimated more than $15 billion of annual revenues by fiscal 2029 from AI components in data centers. Both look set to challenge all-time highs today. Meanwhile, as semiconductor stocks surge after Micron’s update, the Mag 7 hyperscalers who fund them are all down: Microsoft (MSFT) -0.4%, Amazon (AMZN) -0.5%, Meta Platforms (META) -0.2%, Apple (AAPL) -0.5%, Alphabet (GOOGL) -1.2%

• ARS Pharmaceuticals (SPRY) sinks 20% after the biotech company said there has been no new commercial formulary additions or coverage decisions for its epinephrine nasal spray, neffy, in the July 1 cycle.
• Bio-Techne (TECH) climbs 20% after Merck agreed to acquire the company for $73 per share in cash, representing a total enterprise value of around $11.3 billion.
• BlackBerry’s (BB) US-listed shares rise 8% after the software company boosted its revenue forecast for the full year.
• Dollar Tree (DLTR) falls 5% after saying Mantle Ridge and another stockholder sold 12.8 million shares to JPMorgan and Goldman Sachs.
• HB Fuller (FUL) slips 8% after agreeing to acquire Advanced Medical Solutions Group Plc, a British maker of tissue-healing medical products, for $868 million.
• IBM (IBM) gains 3% after the technology giant unveiled the world’s first sub-1 nanometer chip technology.
• Jefferies Financial (JEF) inches about 1% lower after posting second-quarter earnings that missed analyst estimates as the bank pulled in less fees from Point Bonita, which bet on the embattled auto-parts supplier First Brands Group.
• Micron Technology (MU) jumps 18% after its quarterly sales forecast exceeded Wall Street estimates, signaling that an AI-fueled growth run remains strong.
• Trip.com ADRs (TCOM) fall 13% after the company reported adjusted earnings for the first quarter that missed analyst estimates. The online travel agency also expects slower 2Q revenue growth.
• Qualcomm (QCOM) gains 10% after the chipmaker forecast sales of more than $15 billion a year by fiscal 2029 in the market for AI components in data centers.
• Wendy’s (WEN) climbs 13%, on track to extend gains after rallying 26% on Wednesday, as the meme-stock crowd rallies behind the fast-food chain

In other corporate news, Lockheed Martin has been awarded a contract worth as much as $35 billion from the Defense Department to quadruple production of missile-defense interceptors as part of a broader effort by the Trump administration to bolster munitions output.
ARS Pharmaceuticals is down 23% premarket after the biotech provided updates on payer access for neffy, its FDA-approved epinephrine nasal spray, and an updated financial outlook for 2026 and 2027.

Nasdaq futs have erupted, following earnings by Micron and an update from Qualcomm. For Micron (+18.4% pre-market), its Q3 adj. EPS and revenue beat estimates while its Q4 guidance also beat consensus. In terms of commentary, they said that tight conditions are expected to persist beyond FY27, and it has no line of sight on when supply can catch up with demand. For Qualcomm (+12% pre-market), the Co. raised its FY29 non-handset revenue target to USD 40bln, while announcing a strategic relationship with Hugging Face to advance open, developer-driven AI from devices to cloud infrastructure.

The US optimism was palpable in other regions too. A benchmark for Asian stocks advanced 1.4%, with Micron peers SK Hynix Inc. and Samsung Electronics Co. rallying in South Korea. The technology sector far outperformed a 0.6% gain in Europe’s Stoxx 600.

The four most dangerous words in finance are now a daily occurrence, especially by people who should know better. Barclays’ global chair of research, recalling the 82% collapse in semiconductor stocks that burst the dotcom bubble, says this time is different. Addressing concerns about a cyclical bust in semis after their meteoric rise was followed by a pullback in early June, Barclays’ Ajay Rajadhyaksha says: “At the risk of using the four most dangerous words in finance, this time is different. Earnings have exploded, order books are full into 2027, and forward multiples are eminently reasonable.”

He says there may eventually come a boom-bust cycle, but not in 2026. “Despite recent equity wobbles, the semiconductor story is real, it is massive, and it is not going away anytime soon,” he adds.

“In a tech sector with strong growth and high expectations, we think investors will continue to look for signals that the AI adoption theme is playing out as expected,” said Richard Flax, chief investment officer at Moneyfarm. “Micron’s strong results are another data point that supports that positive thesis.”

The pre-market indication for Micron is set to comfortably exceed the roughly 10% absolute move implied by the options market. If these gains hold, it will be another example from the AI complex of seemingly expensive pre-earnings options ultimately proving justified by realized price action.

WTI crude is back below $70 a barrel as oil prices for easier global supply. At 8:30 a.m. ET, Bloomberg Economists expects a hot PCE reading will likely reinforce the hawkish tilt by the Fed at its meeting earlier this month. Meanwhile, the dollar is drifting lower ahead of the print.

Attention now turns Thursday to the release of May’s PCE index, the Federal Reserve’s preferred inflation gauge. Forecasters expect the data to show acceleration on both a monthly and year-over-year basis. Such a reading is unlikely to challenge a growing consensus at the Fed around the need for interest-rate hikes this year. While investors have dialed back bets on the scale of rate increases over the coming year as oil prices shed their war-driven premium, markets continue to see a hike as soon as September.

“If that comes in near expectations or higher, then we see the dollar drive further north,” said Nick Twidale, chief market analyst at AT Global Markets. “We could also see a dent in the positive risk sentiment.”

Markets will also follow remarks from New York Fed President John Williams, Fed Vice Chair for Supervision Michelle Bowman and Austan Goolsbee of the Chicago Fed later today. Given Chair Kevin Warsh’s refusal last week to offer any clues about his own outlook for rates, traders will likely put a premium on commentary from colleagues. 

Meanwhile, China kicked off marketing up to €5 billion ($5.7 billion) of sovereign bonds in what could be its largest-ever such deal in euros. Separately, the nation’s central bank is introducing an overnight tenor into its open-market operations, a key step toward reshaping how it steers short-term borrowing costs.

In less notable news, on Wednesday, JPMorgan, Goldman Sachs, Citigroup and Morgan Stanley were among the big banks to boost their dividends after passing the latest Fed fluff stress tests. Separately, Jefferies second-quarter earnings came in light as it pulled in less fees from Point Bonita, which bet on the embattled auto-parts supplier First Brands Group.

Europe's tech-light Stoxx 600 has only engineered a 0.5% gain even as oil prices continue to tumble. Technology and utilities shares leading gains, while the biggest laggards are media and energy equities. Here are the biggest movers Thursday:

• 3i Group shares jump as much as 11% after the investment company revealed like-for-like growth at discount retailer Action, the single largest holding in its portfolio, accelerated over the last six weeks
• Barratt Redrow shares rise as much as 4.9%, outperforming UK homebuilder peers, after shareholder Phoenix Asset Management Partners said the company should be materially increasing its share buybacks
• EasyJet shares rise as much as 6.6% to the highest level in a year after the UK budget airline rejected a fourth takeover bid from US investment firm Castlelake
• NCAB shares rise as much as 7.5% after SEB Bank set a Street-high price target for the electronics retailer on “sustainably elevated” PCB prices
• Heidelberger Druckmaschinen gains as much as 8.2% following an acquisition by the printing company that spurred an upgrade at MP Capital Markets
• Halfords shares rise as much as 17% to their highest level in over two years after the UK vehicle parts and bicycle retailer’s earnings beat estimates and management flagged a strong start to FY27
• Moonpig shares rise as much as 12% after the giftcard retailer slightly beat consensus estimates for profit. Analysts at Panmure Liberum flag Moonpig’s “crazy cheap” valuation and strong cash returns
• H&M slips as much as 5.2% after reporting second-quarter earnings and saying sales in June are expected to be on par with the same month the previous year

Earlier in the session, Asian stocks rose, led by tech gains in South Korea and Japan after a bullish outlook from Micron Technology and Asian chipmakers’ US-listing plans revived confidence in the artificial intelligence trade. The MSCI Asia Pacific Index gained 1.5%, with SK Hynix, Samsung Electronics and Advantest providing the biggest boost to the gauge. Korea’s benchmark rose 5.4%, while the tech-heavy Nikkei 225 Stock Average in Japan climbed 4.6%.  Renewed optimism followed US-based Micron’s better-than-expected sales forecast, reinforcing confidence that AI‑driven growth remains strong. The role of Asian chipmakers in the global AI supply chain was underscored as Korea’s SK Hynix and Japan’s Kioxia unveiled further details of plans to list in the US. Shares of SK Hynix surged after disclosing plans for a $29 billion US listing, a move that analysts viewed as boosting valuations through capacity expansion and greater foreign investor access. Kioxia climbed as its CFO said it intends to offer US depositary receipts in the spring of 2027. Here Are the Most Notable Movers

• Trip.com ADRs drop 14% in US premarket trading after the company reported adjusted earnings for the first quarter that missed analyst estimates. The online travel agency also expects slower 2Q revenue growth.
• Two founder group firms of Lodha Developers sold 19.88 million shares, or a 1.99% stake, in block deals to raise 18.65 billion rupees ($197.4 million), according to terms of the deal seen by Bloomberg News.
• Topix rose 1.3% to 4,016.47 with electric appliances and information technology sector higher. Nikkei 225 advanced 4.6% to 72,366.34.
• Chip stocks including Advantest and Tokyo Electron were some of the biggest gainers on the Nikkei 225 after Micron Technology forecast stronger-than-expected revenue.
• Evergrande Property Services shares tumble as much as 27% in HK, the most in nearly three years, after the firm said discussions between potential sellers and a purchaser ended.
• Chinese chip-related stocks climb after Micron Technology forecast stronger-than-expected revenue and reported third-quarter earnings that topped estimates. Shares of Alibaba drop in Hong Kong after Anthropic accused the company of waging a large-scale effort to “illicitly” access its Claude artificial intelligence model.
• Sunny Optical shares fall as much as 12%, the most in more than a year, after co. holds investor day. Citi’s note said co.’s optical interconnect commercialization remains at an early stage, with validation ongoing.
• Frasers Property shares rise as much as 4.7% after the Singapore real estate developer said its on-balance sheet hospitality assets are expected to decrease from about S$3.7b to S$2.5b, while keeping AUM at S$4.2b.
• Techtronic Industries’ shares surge as much as 8.1% to a four-year high after the company repurchased nearly 1% of its shares.

MS&AD Insurance Group Holdings shares fell as much as 5.1%, the most since Mar. 30, following a large discounted block trade.

In FX, the greenback has halted its recent ascent with the Bloomberg Dollar Spot Index lower by 0.1% but still at levels not seen since November last year. USDJPY trades near a record high just shy of 162, with the BOJ on intervecntion watch. 

In rates, the recent rally in Treasuries is pausing for breath with the US 10-year yield up 2bps. Treasuries are slightly cheaper across the curve, unwinding a small portion of Wednesday’s aggressive rally as stock futures advance following Micron’s blowout forecast. Nasdaq 100 futures lead gains as bull case for the artificial-intelligence trade is reaffirmed. US long-end yields are nearly 2bp higher on the day with front-end tenors outperforming, steepening 2s10s curve by 1.5bp from near flattest level in more than a year; 10-year, higher by 1bp near 4.405%, trails bunds and gilts in the sector by 2bp and 1bp. Treasury auction cycle concludes with $44 billion 7-year notes sale at 1pm New York time, following uneventful 2- and 5-year notes over past two days. Focal points of US session include May personal income and spending data, which contain PCE price indexes, and a 7-year note auction. 

In commodities, Brent crude futures are down a further 1.4%, having erased their gains since the conflict in Iran began, while WTI crude oil futures are down more than 1% as Middle East exports via the Strait of Hormuz ramp up. The notable downside in energy markets also changes the context in which traders will receive today’s backward-looking US PCE data for May.  Spot gold has lost a further 0.2%, having slipped below the $4,000/oz threshold. Bitcoin is rising 1.3%. 

Looking at today's calendar, US economic data calendar includes May personal income/spending, 1Q GDP revision, May durable goods orders, weekly jobless claims and May Chicago Fed national activity index (8:30am) and June Kansas City Fed manufacturing activity (11am). Fed speaker slate includes Bowman (8:45am), Goolsbee (2pm, 6:30pm) and Williams (3:40pm)

Market Snapshot

Top Overnight News

• Brent erased its wartime gains as flows through the Strait of Hormuz accelerated. But tensions remained as Donald Trump warned that tolls in the waterway are a red line issue in negotiations with Iran. BBG
• Iraq will consider all available options if its OPEC quota is ‌not significantly increased and has weighed leaving the producer group, sources with knowledge of Iraqi oil policy told Reuters. The prospect of OPEC's second-largest producer considering an exit would be a further blow to the group after the departure this year of the United Arab Emirates. Iraq is one of the five founding members of OPEC, which was formed in the Iraqi capital. RTRS
• China started marketing up to €5 billion of sovereign bonds in what would become its largest-ever such deal in euros.
• The BOJ needs to raise interest rates every few months toward a neutral level of around 2%, board member Naoki Tamura said. BBG
• Japan’s 20-year bond auction drew the weakest demand since the market upheaval just over a year ago as worries about inflation and fiscal policy came back to the fore. BBG
• The EU’s trade deal with the US is set to go into effect after the bloc gave its final sign-off ahead of Trump’s deadline. BBG
• Colombian electoral authorities confirmed conservative Abelardo de la Espriella as the winner of the presidential election. He’ll take office on Aug. 7. BBG
• Meta is racing to replace human moderation with generative artificial intelligence, as it undergoes a broader cost-cutting drive to offset chief executive Mark Zuckerberg’s vast spending on AI. FT
• Qualcomm shares jumped premarket (QCOM +12% premkt) after forecasting more than $15 billion in annual AI chip sales by fiscal 2029. BBG
• Fed said 32 large banks are well positioned to weather a severe recession and continue lending under the latest stress test, while the banks tested absorbed more than $700bln in hypothetical losses and saw capital decline only 1.6%, to remain above minimum requirements. Furthermore, the Fed reaffirmed its plan to maintain capital levels steady as it adjusts the testing process and will set new stress capital buffers following the 2027 test. The banks promptly revealed plans to return hundreds of billions in capital to investors through dividends and buybacks. 

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed, albeit with a mostly positive bias and with the KOSPI leading the gains as tech and Nasdaq futures rebounded from the prior day's lows following strong earnings from Micron. ASX 200 was dragged lower by weakness in mining, materials, resources and energy stocks, while better-than-expected headline Australian jobs data failed to inspire and was mostly driven by part-time jobs. Nikkei 225 rallied back above the 72,000 level amid a resurgence in tech and lower oil prices, while markets were unfazed by comments from BoJ hawk Tamura, who called for hiking rates every few months. KOSPI outperformed amid a rally in Samsung Electronics and SK Hynix, with the latter sitting on double-digit percentage gains amid its US IPO plans. Hang Seng and Shanghai Comp were mixed in the absence of any major fresh drivers and with the Hong Kong benchmark dragged lower by losses in miners and further weakness in hyperscalers, including Alibaba, after Anthropic accused the Co. of illicitly accessing AI models in a letter to US officials.

Top Asian News

• USGS reported a magnitude 7.1 earthquake struck off the coast of Venezuela and that a second 7.5 magnitude earthquake hit the same area, while it warned of a potential massive catastrophe from the Venezuela quake, and estimated the quake death toll could exceed 1000, according to NYT.
• Earthquake reportedly hit Japan off the Iwate prefecture with a preliminary magnitude of 6.9, while NHK said Japan quake shaking intensity was 6+ on a scale of 7, while no tsunami warning was issued.- Japan's LDP is facing internal friction, with lawmaker Obuchi reportedly offering to resign if consumption tax is cut to 0%, NTV reported.

European bourses (STOXX 600 +0.6%) begin Thursday's trade with broad gains, with tech-heavy indices leading following positive Micron earnings (AEX +0.8%, DAX 40 +0.6%). As the Iran conflict fades, with energy prices now reversing the wartime gains, equities in Europe can begin to catch up to their peers in the US and Asia. Investors are also seeing Europe as a safer place to place money due to its lack of tech giants, protecting themselves from any AI-related selloff. European sectors highlight the positive bias. Technology (+2.6%), unsurprisingly, is the clear outperformer. Utilities (+1.5%) and Financial Services (+0.8%) complete the top 3 sectors. To the downside is Media (-0.9%), Food, Beverages & Tobacco (-0.4%) and Chemicals (-0.3%).

Top European News

• UK Chancellor Reeves reiterated her backing for MP Andy Burnham, and stated that it is clear he is committed to the fiscal rules. On borrowing more for defence spending, she said the DIP will involve more money. Will not maintain current level of economic growth due to Middle-East conflict and decisions to be make on Jackdaw and Rosebank soon.
• Two of the UK's largest trade unions are increasing pressure on Andy Burnham not to pick Ed Miliband as the Chancellor, arguing that his North Sea oil policy has damaged jobs in the sector, according to FT.
• German Deputy Defence Minister Schmid said they are well underway on reaching the 3.5% defence spend target and that different options to be discussed on the subject of the Eurofighter.

FX

• G10s are mixed but mostly stronger against the Buck with breadth narrow as the Buck rally loses steam and fails to provide a bias to peers.
• USD benefitted this week from the risk-on mood into Micron earnings, which were released after US markets closed on Wednesday. Given the stellar report from the memory maker, risk-on trade has resumed, with equities (specifically tech–heavy indices) bid. DXY a touch lower on the day given the risk tone, trades at the lower end of its 101.44-101.66 range; now looking to PCE.
• Antipodeans lacklustre against the Buck despite the heightened sentiment. Aussie digested better-than-expected headline employment change, which failed to spark a meaningful reaction following on from the mixed inflation report in the prior session, with much of the change driven by temporary activity. AUD/USD +0.1% found buyers below 0.69, AUD/NZD +0.1% lifted from just below the 1.22 mark.
• USD/JPY continues to lack a bias as it hovers around levels not seen since July 2024. BoJ’s Tamura spoke overnight, sticking to the hawkish bias, advocating for tightening “once every few months” to a terminal of 2%. Despite the remarks initially helping the Yen, the move failed to stick, with the pair flat and approaching 162 to the upside.
• GBP remains focused on the Fiscal/Chancellor situation. Current Chancellor Reeves on the wires this morning, not providing too much new but seemingly teeing herself up to keep the role at no. 11. Prior to this, The Times reported that Miliband has been developing key economic policies for the new government, with particular reference to fiscal implications, a point potentially unwelcome by UK investors given his track record as Energy Secretary. GBP has not taken the skew from Gilts which underperform peers today amid the continued Miliband reporting, GBP/USD +0.1% after bouncing off 1.3150.

Fixed income

• Global fixed benchmarks are softer across the board, albeit only modestly. This does come after the benchmarks surged in Wednesday's session, causing yields to break key markers, as energy prices continued to fall.
• USTs (-3 ticks) have pulled back from Wednesday's and Today's peak of 110-01, with 10yr yields slipping below the support level of 4.422%. Despite the positive 2-year auction on Tuesday, it failed to feed through to the 5-year tap. A busy data docket is ahead, with Core PCE Price Index (the Fed's preferred inflation gauge) expected to hold steady at 3.3% Y/Y. Final Q1 GDP is also expected to remain unchanged at 1.6%. Initial jobless claims, durable goods orders, Atlanta Fed GDP and a 7-year auction are also on the docket.
• Bunds (+3 ticks) and Gilts (-9 ticks) are also softer, but off worst levels. For German debt, its Q3 issuance plan was left unchanged, looking to raise EUR 138bln in the quarter. Bunds were unreactive following the announcement. ECB's Schnabel was on the wires this morning, reiterating her stance that the ECB will need to raise rates further to bring back inflation to 2%, while stating that although the short-term situation looks better than expected, the ceasefire is no reason for policymakers to let their guard down. For Gilts, although they were unreactive, the Guardian reported that some senior officials are pushing incoming-PM Burnham to issue GBP 20bln of "war bonds" to pay for higher defence spending. We are now attentive to specifics around the duration and magnitude of any theoretical issuance.
• JGBs (+5 ticks) consolidated, with a poor 20-year auction capping the upside. The b/c ratio dropped to 2.97, below the prior 4.01x and 12-month average. No significant move seen to hawkish BoJ speak overnight.
• German Q3 debt issuance plan unchanged, as expected: to raise EUR 138bln in Q3, set to issue EUR 512bln in 2026.
• UK sells GBP 1.5bln 0.50% 2029 Gilt via tender: b/c 3.61x (prev. 3.86x), average yield 4.062% (prev. 3.841%).
• Japan sells JPY 530.4bln 20-year JGBs; b/c 2.97x (prev. 4.01), average yield 3.542% (prev. 3.711%)

Commodities

• Attention today has been on a recent route dispute on the Strait of Hormuz. The IRGC rejected a newly formed shipping lane, which traverses towards Omani waters, with the Group stating that it only accepts passage through it own routes. The IRGC warned that any attempts to pass through the Strait, outside of their own route, will be dealt with accordingly.
• Focus also on the Lebanon situation. Initially a US official stated that Israel had pulled back from parts of its buffer zone in Lebanon, which was then pushed back by Lebanese sources; it was then later confirmed by the Israelis that it had not received any instructions to pull back. This spurred some mild strength in the crude complex at the time.
• WTI and Brent are once again on a weak footing this morning, trading lower by c. 1.2% and 1.3% respectively. Markets continue to cheer the reopening of the Strait, with dozens of ships continuing to pass through daily. It is unclear how long this exuberance will last, given the risks surrounding the new Strait route and conflicting remarks and the volatile Lebanon-Israel situation.
• Also interesting was comments made by a senior Iraqi Oil Ministry official, who said the nation will consider all available options if its OPEC quota is not significantly increased and have considered the idea of leaving OPEC
• Spot gold trades shy of the USD 4k/oz mark, and holds within a USD 3,962-4,018/oz range, which is towards the bottom end of Wednesday’s trading bands. Analysts highlight several factors for the recent move lower in gold, which includes: 1) loss of safe-haven appeal, 2) stronger USD, 3) hawkish shift at the Fed, spurred following Warsh’s debut. On the latter point, Warsh ultimately highlighted the importance of price stability, which helped to push back on traders eyeing a debasement trade.
• Elsewhere, for the yellow metal, Bloomberg reported that major Chinese banks are reportedly shutting services supporting retail precious metals trading after gold and silver volatility. Elsewhere, 3M LME copper is firmer this morning, and trades within a USD 13,056.5-13,242.13/t range.
• US President Trump said he spoke with oil companies and that oil companies are not reducing gas prices enough, adding they will be in trouble if they are gouging.
• Saudi Arabia is reportedly set to restart Ras Tanura (550k BPD) oil exports as Gulf flows rise.
• Senior Iraqi Oil Ministry official said the nation will consider all available options if its OPEC quota is not significantly increased and have considered the idea of leaving OPEC. The current plan is to remain and gain higher quota.
• Iraqi Government spokesperson said the nation is working to restore full oil export capacity and aims to raise production to 7mln BPD over the coming years.
• China is reportedly raising its refined fuel export allowance for July, according to reports.
• Early reports suggest oil export and production were unaffected by the Venezuela earthquakes, according to Bloomberg's Blas.
• Chevron (CVX) CFO said gas prices will normalise, following pressure from President Trump on big oil companies, CNBC reported.
• Major Chinese banks are reportedly shutting services supporting retail precious-metals trading after gold and silver volatility, Bloomberg reported.

Trade/Tariffs

• The EU has given the US trade deal final approval, according to Bloomberg.
• UK Government announced new steel trade measures, effective July 1st. It will reduce the overall quota volumes by 51% and that any imports above would have a 50% tariff.

Central Banks

• ECB's Schnabel said the short term situation now looks better than had been expected but the ceasefire is no reason for policymakers to let their guard down. We will need to raise interest rates further in order to bring inflation back to the two percent target over the medium term.
• BoJ Board Member Tamura said it is important to push the BoJ’s policy rate closer to neutral to avoid being forced to hike rates sharply later, and his view is for the BoJ to raise its policy rate once every few months towards a neutral level of around 2%. Tamura also stated that if upside price risks become more likely to materialise, the BoJ should not hesitate to speed up rate hikes or raise rates by a larger amount, while he voted against the decision to pause tapering from next fiscal year, as the BoJ should normalise the balance of its bond holdings as soon as possible.

Geopolitics

• US President Trump reiterated that Iran will never have a nuclear weapon, while he adds that we will have peace in the Middle East. Trump separately commented that it is unacceptable to have fees on the Strait of Hormuz and they are doing great in negotiations with Iran, while he added that the Iran war powers vote is meaningless.
• US Secretary of State Rubio said we hope to reach a final agreement with Iran, but not at any price, and are now entering a new phase that hopefully leads to peace. Will not accept that Hormuz belongs to any nation-state. US President Trump has been fundamentally clear about the tolling issue. It can be a toll or a fee, but it is all semantics.
• US Senate Republicans defeated a war powers resolution regarding Iran in a 50-47 vote, to appease President Trump following a heated lunch meeting, according to NYT
• A US State Department official said Israel has pulled back from part of its buffer zone in southern Lebanon as an act of good faith. However, this was later refuted, with a Lebanese military source telling Al-Araby that the Israeli army has not withdrawn from any point in the areas it occupies in southern Lebanon. This was also denied by a senior Israel official.
• "Lebanese media outlets are reporting that an Israeli drone attacked the village of Tabit, in the Nabatia region in southern Lebanon", via Kan's Kais.
• Five South Korean ships were said to have exited the Strait of Hormuz, although the time frame is uncertain.
• Ukraine President Zelensky confirmed its military hit an oil depot in Russia’s Krasnodar region and two oil refineries in the Ufa region.

US Event Calendar

• 8:30 am: May Personal Income, est. 0.4%, prior 0%
• 8:30 am: May Personal Spending, est. 0.6%, prior 0.5%
• 8:30 am: May PCE Price Index YoY, est. 4.1%, prior 3.77%
• 8:30 am: May Core PCE Price Index MoM, est. 0.3%, prior 0.2%
• 8:30 am: May Core PCE Price Index YoY, est. 3.4%, prior 3.29%
• 8:30 am: 1Q T GDP Annualized QoQ, est. 1.6%, prior 1.6%
• 8:30 am: 1Q T Personal Consumption, est. 1.4%, prior 1.4%
• 8:30 am: 1Q T GDP Price Index, est. 3.5%, prior 3.5%
• 8:30 am: 1Q T Core PCE Price Index QoQ, est. 4.4%, prior 4.4%
• 8:30 am: Jun 20 Initial Jobless Claims, est. 225k, prior 226k
• 8:30 am: Jun 13 Continuing Claims, est. 1801.5k, prior 1810k
• 8:30 am: May P Durable Goods Orders, est. -5%, prior 8%
• 8:30 am: May P Durables Ex Transportation, est. 0.6%, prior 1.1%
• 8:30 am: May Chicago Fed Nat Activity Index, est. 0.15, prior 0.14

Central Bank Speakers

• 8:45 am: Fed’s Bowman Speaks on Small Bank Supervision
• 2:00 pm: Fed’s Goolsbee on CNBC
• 3:40 pm: Fed’s Williams Gives Keynote Remarks
• 6:30 pm: Fed’s Goolsbee in Moderated Discussion

DB's Jim Reid concludes the overnight wrap

Markets are in a buoyant mood this morning, with Brent crude oil prices finally back at their pre-conflict levels. They’ve fallen another -1.70% overnight to $72.49/bbl, which is almost exactly in line with their $72.48/bbl level immediately before the US and Israel began their strikes on Iran on February 28. It comes as flows through the Strait of Hormuz have continued to ramp up, with the number of vessels getting through at its highest since the conflict started. And more broadly, the oil price decline has eased fears about a stagflationary shock and aggressive rate hikes to deal with any inflation.

Alongside the oil price declines, the other positive story overnight came from Micron’s earnings after the US close. Their revenue outlook was at $50bn for the fiscal fourth quarter running through August, well above the $43.2bn analyst consensus. So that reignited hopes about AI-fuelled growth and helped to push back against fears we were in some kind of bubble. And in turn, Micron’s shares surged nearly 16% in after-hours trading, and futures on the NASDAQ 100 have also surged +1.77% overnight. So that tech strength has helped to lift US equities more broadly, with S&P 500 futures up +0.53%, finally pointing to a recovery after 3 consecutive losses for the index.
This positivity has been clear in Asian markets overnight, with the Nikkei (+4.10%) and the KOSPI (+5.73%) both surging, alongside a strong gain for the CSI 300 (+1.61%). The main exception to that pattern has been the Hang Seng (-1.38%), which is currently on course for a one-year low. But otherwise, sentiment has been very positive, and the Japanese Yen has also stabilised overnight, up +0.03% to 161.73 per US Dollar. For reference, it closed at its weakest since 1986 yesterday, at 161.78 per US Dollar, although it hasn’t quite got to the intraday low in that time, as it briefly traded at 161.95 back in July 2024.

Ahead of that overnight positivity, oil prices had already seen a decent decline, with Brent crude falling -4.33% to $73.74/bbl. In part, that was thanks to growing signs of more traffic flowing through the Strait of Hormuz. Moreover, multiple US officials were sounding negative over the prospect of tolls in the Strait of Hormuz. For instance, Trump posted that Iran had informed the US there would be no tolls or charges in the Strait of Hormuz, and that “If this is false information, negotiations would end, immediately!” Meanwhile, Secretary of State Rubio said that “No country is allowed to charge tolls or fees on an international waterway”. So the newsflow led to growing optimism about a normalisation in the energy market, which would help to avoid any lasting inflationary consequences.

This backdrop helped equities to stabilise after their losses on Monday and Tuesday, with the S&P 500 (-0.10%) only posting a modest decline. That came as the Mag 7 (-0.82%) fell further into correction territory, having now fallen -11.6% since its May 28 peak, whilst the S&P 500’s energy sector (-1.73%) also struggled amid the decline in oil prices. But there was some positivity more broadly, with almost two-thirds of the S&P constituents higher on the day, leaving the equal-weighted S&P 500 up +0.71%. And over in Europe, the STOXX 600 (+0.08%) posted a marginal gain as well.

Whilst equities were stabilising, there were much bigger milestones for sovereign bonds, as lower oil prices helped to ease concerns about inflation. In fact, the 1yr US inflation swap (-12.3bps) fell to just 2.16%, marking its lowest level since October 2024. And over in the Euro Area, the 1yr inflation swap (-14.0bps) fell to a 3-month low of 2.31%. So in turn, that meant investors priced out the chance of rate hikes for the months ahead. For instance, just 35bps of Fed hikes are now priced in by December, down -2.9bps on the day. And similarly for the ECB, just 29bps more hikes are priced in by December, down -2.5bps on the day.

For sovereign bonds, that combination of easing inflation fears and more dovish central bank pricing was a strong one. So yields saw very large falls on both sides of the Atlantic, and the 10yr Treasury yield (-10.5bps) fell back to 4.39%. That was echoed in Europe too, where yields on 10yr bunds (-5.5bps) reached a 3-month low of 2.86%, whilst yields on 10yr OATs (-5.2bps) and BTPs (-5.5bps) also moved lower. There was also a decent round of yield curve flattening, as longer-dated yields posted bigger falls than the front-end. So the 2s10s Treasury curve (-5.4bps) fell to just 24bps by the close, its flattest since March 2025. And over in Germany, the 2s10s curve (-2.1bps) fell to 32bps, its flattest since February 2025.

Otherwise in Europe, those yield declines saw a modest pullback after hawkish comments from the ECB’s Schnabel. It wasn’t enough to outweigh the effect of lower oil prices, but she pointed to more hikes ahead, saying the ECB “will need to continue raising interest rates in order to bring inflation back to our target of 2% in the medium term”. Moreover, she also said that “the ceasefire is no reason for monetary policy to let its guard down”. So those comments re-affirmed Schnabel’s position at the hawkish end of the ECB Governing Council.

Here in the UK, gilts continued to outperform their European counterparts, reflecting how they’ve seen some of the biggest moves in either direction since the Iran conflict began. So the 10yr gilt yield fell -7.2bps yesterday to 4.68%, its lowest level in 3 months.

Meanwhile on the political side, Chief Secretary to the PM Darren Jones ruled himself out of succeeding Keir Starmer as Labour leader. So that meant expectations continued to rise that Andy Burnham could win without a contest, and the Polymarket probability of him becoming PM in 2026 is now at 98%. Speaking of the UK, the Deutsche Bank Research Institute piece on the 10th anniversary of the Brexit referendum can be found here, and to those who’ve signed up to the event today, it’s still going ahead.

Elsewhere, there were a few other notable market moves yesterday. The dollar index (+0.20%) continued its recent rise, reaching its highest level since May last year. Then on the opposite end, gold fell below the $4,000 level for the first time since November (-2.86% to $3,999/oz) and is now more than -25% below its January peak. Meanwhile, yesterday saw Bitcoin reach its lowest intraday level since October 2024, at $59,023, although it’s since recovered this morning to $60,956.

Finally, there were a couple of other data releases yesterday, including the Ifo Institute’s business climate indicator from Germany. That rose to 85.6 in June (vs. 85.5 expected), marking a second monthly gain after falling back in March and April. Interestingly, the current assessment indicator was up to 87.0, its highest since July 2024, but the expectations indicator only rose to 84.1, still clearly beneath its levels before the Iran conflict. Over in the US, we also got new home sales for May, which unexpectedly fell to an annualised rate of 580k in May (vs. 640k expected).

Looking at the day ahead now, US data releases include the PCE inflation reading for May, the third estimate of Q1 GDP, the weekly initial jobless claims, and preliminary durable goods orders for May. Otherwise from central banks, we’ll hear from the ECB’s Moulin, Lane, Cipollone, and the Fed’s Bowman, Williams and Goolsbee. Meanwhile, the ECB will also publish their Economic Bulletin.

Tyler Durden Thu, 06/25/2026 - 08:22