The Fed Confirmed the Hawkish Turn. Trump Reopened the War. Tech Held Anyway.

The week’s main event landed — and it confirmed the hawkish turn without escalating it. The June FOMC minutes reinforced that the Fed has moved away from its easing bias toward a genuinely two-sided, data-dependent stance, with officials increasingly worried that inflation pressures are becoming more widespread. But the minutes shared the stage with geopolitics: President Trump declared the Iran ceasefire “over,” saying the US “hit them very hard” and would “probably hit them hard again tonight.” The result was a split, choppy tape — the Dow fell 1.09% to 52,348 on the war headlines, while the Nasdaq eked out +0.20% as chips rebounded on a blockbuster Apple–Broadcom deal.

🏦 The FOMC minutes — the easing bias is gone, inflation concerns widen

The document confirmed what Warsh signaled in June, with important detail:

• The minutes reinforced a shift away from any rate-cut bias toward a neutral, two-way stance — flexible observation in both directions, not a pre-set path
• The core worry: inflation is becoming more widespread. Officials flagged pressures spreading beyond energy and tariffs into services and other categories
• A few participants saw a case for raising rates immediately but chose to hold — consistent with June’s nine-of-eighteen hawkish dots
• Strong AI-related investment continued to support activity and could keep demand stronger than expected — while lower-income households increasingly lean on credit, a widening divide
• Net: validates “higher for longer,” but the two-way framing means no pre-commitment to hikes — a genuinely data-dependent hold

🛢️ Trump: the ceasefire is “over” — war risk snaps back

The geopolitical backdrop deteriorated sharply through the session:

• Trump declared the US–Iran ceasefire over, saying “we hit them very hard last night” and “we’ll probably hit them hard again tonight” — with no intention of resuming talks
• Reports late in the session indicated the US had begun fresh strikes on Iran in the evening (still developing at the close)
• This follows Tuesday’s tanker attacks near Hormuz that pushed oil up 5% — the fragile mid-June peace has now openly broken down
• The IMF weighed in, flagging stalling global disinflation and higher oil as a growing risk, explicitly citing Hormuz

📈 The split tape — Broadcom’s $30B Apple deal saves tech

Even with war headlines and a hawkish Fed, chips bounced:

• Dow: -1.09% → 52,348.39 — 23 of 30 components fell; only Caterpillar and Amgen among the top holdings rose
• S&P 500: -0.28% → 7,482.71
• Nasdaq: +0.20% → 25,870.65 — the outperformer, buoyed by a semiconductor rebound
• Broadcom +5.9% to $393.25 after Apple announced a multi-year partnership worth over $30B — Apple’s largest US manufacturing commitment (15B+ US-made chips; Broadcom becomes Apple’s fifth AI-ASIC customer)
• Other winners: Alibaba +11.6%, Akamai +7.9%, Arista +7%, Penguin Solutions +26.6% (earnings)
• SpaceX steadied after a rough ~7% Nasdaq-100 debut Tuesday

📊 Wednesday snapshot

• Dow -1.09% → 52,348.39 (23 of 30 lower)
• S&P 500 -0.28% → 7,482.71
• Nasdaq +0.20% → 25,870.65 (chips rebound)
• FOMC minutes two-way, data-dependent · inflation concerns widening · a few saw a hike case
• Iran Trump says ceasefire “over,” more strikes signaled · reports of fresh US strikes (developing)
• Broadcom +5.9% (Apple $30B+ deal) · Alibaba +11.6% · Penguin +26.6%

📅 The rest of the week (GMT)

• Thu, Jul 9 — Initial jobless claims · PepsiCo earnings (pre-open — Q2 season opener)
• Fri, Jul 10 — Delta Air Lines earnings (summer-travel bellwether) · light data
• Looking ahead: June CPI lands Tue Jul 14 — the last major inflation read before the July 28–29 FOMC, now with the Hormuz oil spike feeding in

🧠 Bottom line

The minutes did their job: they confirmed a Fed that has stepped away from rate cuts and is watching inflation spread beyond energy — the “inflation is a choice” framing from June, now backed by the committee’s own record. Crucially, the two-way stance means the base case is a patient hold, not an imminent hike — hawkish, but not trigger-happy.

The bigger shift was geopolitical. Trump declaring the ceasefire over — with fresh strikes reportedly underway — puts the war premium back into oil right as the Fed frets about broadening inflation. The soft-landing trade was built on the inflation peak being behind us, and a re-opened war is the cleanest threat to that. That tech still closed green on Broadcom’s Apple deal shows the AI-capex engine the Fed flagged is powerful enough to fight the tape — but the collision of hawkish Fed, hot-again oil and resumed war sets up next week’s CPI as the most important print in months.

The Fed buried the easing bias, Trump reopened the war-risk premium, and only the Apple–Broadcom megadeal kept tech green. CPI now carries the weight.