TUESDAY MARKET UPDATE
Yesterday was the fireworks. Today is the silence before the Fed. Markets are barely moving. Warsh begins his first FOMC meeting in about an hour. Tomorrow at 2 p.m. we find out what kind of Fed Chair he plans to be.
🟩 | S&P 500 hit a new all-time high — 7,554 Monday, the peace-dividend rally in full swing.
🟩 | Nasdaq surged 3.1% — best single-day gain since March; tech leading the peace trade.
🟥 | Oil still sliding — WTI hovering near $80; down 30%+ from the $115 peak in three weeks.
Gold & Macro
WARSH INHERITS THE BEST HAND IN MONTHS
Gold at $4,351 this morning. Holding Monday's 2.8% gain. Silver steady near $71. The metals aren't moving today because nothing is moving today. Everyone is waiting for the same man.
Kevin Warsh starts his first FOMC meeting this morning with a hand no one expected: oil at $80 instead of $115, a peace deal electronically signed, CPI at 4.2% but falling fast, and a 10-year yield at 4.42% that's finally easing. Goldman expects a hold at 3.50–3.75% — that's priced in. The real event is the dot plot. Goldman sees three members projecting a hike. Warsh may not submit dots at all, given his years of criticizing forward guidance.
If Warsh signals patience tomorrow, the dollar weakens further and gold catches another bid. If he surprises hawkish — language like “data-dependent” while the dots show hikes — gold gives back Monday in an afternoon. The DXY at 99.50 says the market is betting on patience. Tomorrow at 2 p.m. we find out.
The Trade
RECORD S&P, RECORD DOW, AND THREE RISKS NOBODY MENTIONS
S&P 500 at 7,554. New all-time high. Dow at 51,671. Also a record. Nasdaq surged 3.1% Monday — best day since March. The market has priced in a signed deal, sub-$80 oil, a dovish Warsh, and falling inflation. That's a lot of good news baked into one number.
Three things the rally is ignoring. One: Israel said publicly that “Trump's agreement does not bind us”. Israeli troops are still in Lebanon. Iran's foreign minister warned that violates the deal framework. Two: CPI is still 4.2%. PPI is 6.5%. Oil is falling but the backward-looking data hasn't caught up. If Warsh's dot plot shows three members projecting hikes, the market reprices. Three: the deal is “electronically signed” — not formally signed. Friday in Switzerland is the real test. Trump has announced six near-deals since March. This one has more substance. But the S&P at a record is pricing certainty where uncertainty still lives.
What to watch:
Tomorrow at 2 p.m.: FOMC decision, dot plot, and Warsh's first press conference at 2:30. May retail sales at 8:30 a.m. Thursday: Kroger, Lennar, FedEx earnings. Friday: formal signing in Switzerland — markets closed for Juneteenth.
Heat Check
Nathan’s Take
“Record S&P prices a peace deal, a dovish Fed, and falling inflation — all at once, none confirmed. That's not confidence. That's a credit card.”
Names to Know
SPACEX, BOEING, YUM BRANDS
SpaceX $SPCX ( ▲ 9.39% ) — surged on Day 2, now above $2.2 trillion; up 30%+ from its $135 IPO price in three sessions; Gina Rinehart disclosed a $1B+ stake.
Boeing $BA ( ▼ 1.22% ) — led the Dow on the peace rally; defense and aerospace catching the deal bid as geopolitical risk falls.
Yum Brands $YUM ( ▲ 2.61% ) — announced it's spinning off Pizza Hut as a separate public company; $85M in separation costs through 2026.
Chevron $CVX ( ▼ 0.54% ) — worst Dow performer Monday as oil crashed; the war premium evaporation is repricing the entire energy sector.
United Airlines $UAL ( ▲ 0.74% ) — led airline gains as jet fuel costs collapse; Norwegian Cruise and Carnival also surging 3%+.
For real-time data, I recommend monitoring Finviz.
The Macro Edge
🇮🇱 | Israel warned that “Trump's agreement does not bind us” — troops remain in Lebanon; Iran's FM says that violates the deal framework.
⛽ | U.S. gasoline prices fell below $4/gallon for the first time since April — oil's 30% crash reaching the pump.
🍕 | Yum Brands announced a Pizza Hut spinoff into a separate public company — $85M in separation costs through year-end.
🇦🇺 | Reserve Bank of Australia held rates steady at 4.35% — global central banks staying cautious as oil rewrites the inflation picture.
📺 | DOJ cleared the $110B Paramount-WBD merger — creating a media behemoth; Fox's $22B Roku deal reshapes streaming.
Tomorrow decides two things at once. Enjoy the quiet.
Nathan Reed | Profits & Insights
