1. Moving the market

The Dow kicked things off on a strong note, hitting a fresh intraday all-time high as oil prices ticked higher and traders waited on the Fed’s latest decision.

Oil got a bit of a boost after Trump said a deal with Iran still isn’t finalized, warning the U.S. could “go right back to dropping bombs” if it doesn’t meet expectations. That’s a shift from earlier this week when energy prices slid on news of a potential agreement to end the conflict.

On the geopolitical front, there was some cooling in tensions elsewhere, with Pakistan’s Prime Minister Sharif confirming that military operations have stopped, and a formal signing ceremony set for Friday in Switzerland.

Meanwhile, all eyes were on the Fed. This marked the first decision under new Chair Kevin Warsh, and while markets expected rates to stay put in the 3.5%–3.75% range, there was still plenty of nervous anticipation—especially with political pressure building for rate cuts, even as growth and inflation dynamics remain tricky.

Initially, things looked calm. The Fed did hold rates steady as expected. But then came the shift: the central bank scrapped its forward guidance and dropped its easing bias altogether.

Instead, the message turned clearly hawkish, emphasizing its commitment to price stability. With nine policymakers now leaning toward higher rates and at least one hike this year looking likely, markets didn’t take it well.

That was the turning point. What started as a quiet session quickly unraveled, with stocks sliding across the board and metals following suit.

Short-term bond yields spiked, the dollar surged, and gold took a hit—falling back below $4,250. Bitcoin was just as volatile, popping higher at first before reversing sharply and dropping below $64.5K.

All in all, markets are looking a bit fragile right now. Trading volumes are elevated, but liquidity is thin—and that combination can amplify moves, especially as we head into the quieter summer months.

I am pondering: was this just a knee-jerk reaction, or are markets starting to price in a tougher road ahead?

1. Moving the market

The S&P 500 started the day pretty flat, while the Dow was still riding the momentum from its fresh record close in the previous session, helped by optimism around a potential U.S.–Iran deal.

One of the biggest stories was SpaceX, which kept its post-IPO hype going with another 10% jump. The move briefly pushed its market cap past both Microsoft and Amazon during the session—pretty wild for a company that just went public last week.

Meanwhile, oil continued to slide. Brent crude dropped about 3% to around $80 per barrel, even dipping below that level briefly for the first time since March.

Easing geopolitical tensions, including news that Pakistan and its counterpart agreed to end military operations, added to the downward pressure. There were also comments about the Strait of Hormuz reopening, which helped accelerate the drop in oil prices.

Despite the generally upbeat backdrop, investors aren’t exactly worry-free. Inflation remains the top concern for 34% of traders, while 28% are increasingly uneasy about a potential AI bubble forming.

By the closing bell, the story was mixed. The Dow managed to hold onto gains, but tech stocks struggled, dragging the S&P 500 and Nasdaq into the red.

Even falling oil prices couldn’t give tech much of a lift, though consumers may welcome some relief at the gas pump.

In other markets, bond yields moved lower, with the 30-year dropping well below 5% to its lowest level since April. The dollar softened, gold edged slightly higher, and Bitcoin slipped back below $66K.

Now, with the FOMC meeting up next and triple witching later this week, the big question is whether the AI-driven momentum can keep carrying the market—or if these headwinds will finally start to bite.

So, will bullish sentiment keep winning out, or are we about to see a reality check?