Now I have the full picture. Let me write the post.
—
“`
- Tech led all sectors at +4.49% as the Nasdaq gained 3.28%; Energy was the worst performer at -5.86% after the US-Iran ceasefire crushed crude
- Warsh's first FOMC held rates at 3.50-3.75% but killed forward guidance — the dot plot now shows 9 of 18 members eyeing a hike by year-end
- WTI crude collapsed 9.83% as the Strait of Hormuz agreement stripped the war premium; the dollar firmed +1.10%, pressuring gold and silver lower
All four major indices posted gains this week, the Nasdaq led at +3.28%, and the VIX dropped below 17 — yet the rally happened against one of the most consequential policy shifts in years: Kevin Warsh’s first FOMC killed forward guidance and tilted the dot plot toward a rate hike.
The Week in the Indices
The Nasdaq 100 was the standout, climbing 3.28% to 740.6 as megacap tech reasserted leadership. The Russell 2000 followed at +2.03% to 295.6, a constructive sign for breadth. The S&P 500 gained 1.48% to 746.7 and the Dow added 1.49% to 515.5, both recovering from a mid-week selloff after the Fed decision landed Wednesday afternoon.
The VIX settled at 16.78, down 5.09% on the week. That puts it in the neutral band — not complacent sub-15 territory, but well clear of the fear threshold above 20. The read: equity markets absorbed a hawkish Fed pivot and an oil shock without breaking stride. Buyers used the Wednesday dip as an entry point rather than an exit signal.
Sector Winners & Losers
Technology (XLK) dominated at +4.49%, its strongest weekly print in months. Semiconductors were the engine — Direxion’s 3× semi bull ETF jumped 20% in a single session. Industrials (XLI) rode the same risk-on bid to +3.29%, while Financials (XLF) gained 1.81% as the curve steepened modestly and the hawkish dot plot reinforced the higher-for-longer rate thesis that benefits bank net interest margins.
On the other side, Energy (XLE) cratered 5.86% — a direct casualty of the Iran deal collapsing the war premium on crude. Healthcare (XLV) fell 3.04%, underperforming for a third straight week. The rotation story is clear: risk-on growth leadership, with the oil-deflation trade punishing the commodity complex and anything tied to it.
Rates, Commodities & the Dollar
The 10-year yield dipped 1.08% to 4.487% and the 30-year eased to 4.975%, falling despite the hawkish dot plot. The bond market is reading the Iran deal as disinflationary — cheaper oil lowers headline CPI expectations, which offsets the Fed’s rate-hike signaling. For equities, lower long-end yields are a tailwind for duration-sensitive growth stocks, which explains why tech outperformed so decisively.
WTI crude collapsed 9.83% to $76.54, the sharpest weekly decline since the early stages of the Middle East conflict. The US-Iran agreement to reopen the Strait of Hormuz removed the geopolitical floor under oil prices. Gold slipped 1.00% to $4,173 and silver dropped 4.35% to $64.91 — both pressured by the DXY rallying 1.10% to 100.8. Copper fell 1.45% to $6.337, a minor drag but nothing that signals a growth scare.
What Drove the Week
Three catalysts set the tone. First, the FOMC held rates at 3.50-3.75% on Wednesday but delivered a structural shock: new Chair Kevin Warsh announced the end of forward guidance entirely, calling it “not well-suited to the current policy conjuncture.” That is a clean break from the Powell era. Nine of 18 dot-plot participants now project at least one hike by December, up from six in March. Markets sold off Wednesday afternoon, then reversed hard Thursday as traders recalibrated.
Second, the US-Iran ceasefire and Strait of Hormuz reopening agreement, reached June 15, repriced the entire energy complex. WTI gave back nearly 10% in five sessions as the war premium evaporated.
Third, the IPO market stayed hot. SpaceX (SPCX), which debuted June 12 at $135, hit an all-time high of $225.64 on Monday before the post-IPO frenzy faded — bankers are now preparing a potential $20 billion bond offering. Kardigan (KARD), a cardiovascular biotech, surged 38% on its Nasdaq debut after an upsized $400 million raise.
Week Ahead
The bias heading into next week is cautiously risk-on — tech leadership, falling VIX, and lower yields are a supportive backdrop, but the Warsh regime introduces a new variable markets have not had to price in years: genuine policy uncertainty with no Fed hand-holding. The Nasdaq 100 at 740.6 is the level to watch; a clean hold above 720 keeps the rally structure intact. The biggest catalyst will be Friday’s PCE inflation print — if it comes in soft, the dot-plot hawks lose their ammunition and this rally has room to extend. Luna3 will be tracking the setup all week.
Read next: Market Pulse · VIX Term Structure · What Is a Bond?
Get early access to Orbit
Orbit is Luna3.ai’s AI-augmented research engine. 12 algorithmic signals + a gradient-boosted ML model + an agentic LLM that reads each top pick’s filings and writes a daily thesis with conviction score and catalyst proximity. Three regimes, three playbooks — growth in expansion, defensives in late-cycle, recovery plays at panic bottoms. The 3 in Luna3.ai.
No spam. Unsubscribe any time.
“`
No comments yet. Be the first to share your thoughts!