Equity markets ended June lower, as easing geopolitical risks weren’t enough to outweigh a hawkish start to Fed Chair Kevin Warsh’s tenure and shifting dynamics in the megacap tech space.
The United States and Iran reached an agreement to end hostilities and reopen the Strait of Hormuz, removing one of the most significant near-term risks facing oil markets.
Technology leadership rotated away from the hyperscalers and toward the companies benefiting from AI infrastructure spending, led by semiconductor and memory/storage names.
U.S. Treasury yields traveled a wide range but finished June close to where they started, with the 10-year hitting a mid-month peak of 4.56% before closing the month at 4.45%
Kevin Warsh’s first meeting as Fed Chair brought a hawkish pivot, with an updated dot plot lifting the year-end rate target to 3.8% and putting at least one rate hike on the table.
Looking ahead, July will bring considerably more clarity on the pace of AI capital expenditures, the path of inflation, and the Fed’s next policy move, with CPI, PCE, the July FOMC meeting, and the start of second quarter earnings season all on the calendar
Equity Market Overview
History does not repeat itself, but it does rhyme, and right now we hear two distinct melodies playing at once.
Equity markets ended June lower, as easing geopolitical risks weren’t enough to outweigh a hawkish start to Fed Chair Kevin Warsh’s tenure and shifting dynamics in the megacap tech space.
The United States and Iran reached an agreement to end hostilities and reopen the Strait of Hormuz, providing a geopolitical tailwind for global markets and energy supply chains. The deal, reached after weeks of back-channel diplomacy, removes one of the most significant near-term risks facing oil markets and represents a constructive step toward regional stability. Critics have questioned the terms of the agreement and whether all parties will fully comply, and it would be unrealistic to assume there will be no further challenges. Nevertheless, we view this outcome as positive for the broader economy: lower energy price risk, improved shipping confidence, and reduced geopolitical uncertainty are meaningful tailwinds.
Markets will now look to upcoming inflation data to confirm how much relief the de-escalation actually delivers.
July ISS
July ISS
Performance Review & Outlook
Highlights
Equity Market Overview
History does not repeat itself, but it does rhyme, and right now we hear two distinct melodies playing at once.
Equity markets ended June lower, as easing geopolitical risks weren’t enough to outweigh a hawkish start to Fed Chair Kevin Warsh’s tenure and shifting dynamics in the megacap tech space.
The United States and Iran reached an agreement to end hostilities and reopen the Strait of Hormuz, providing a geopolitical tailwind for global markets and energy supply chains. The deal, reached after weeks of back-channel diplomacy, removes one of the most significant near-term risks facing oil markets and represents a constructive step toward regional stability. Critics have questioned the terms of the agreement and whether all parties will fully comply, and it would be unrealistic to assume there will be no further challenges. Nevertheless, we view this outcome as positive for the broader economy: lower energy price risk, improved shipping confidence, and reduced geopolitical uncertainty are meaningful tailwinds.
Markets will now look to upcoming inflation data to confirm how much relief the de-escalation actually delivers.
Dreams are important.
Aspirations are what help make goals reality.