Morning Wrap - De-escalation in Hormuz, SpaceX drop fuels Big Tech decline (23.06.2026)

🛢️ Commodities and Geopolitics

• Oil price drop: A barrel of Brent crude has fallen below the 78 USD level, as the market reacts to the de-escalation of tensions in the Middle East.
• Breakthrough in US-Iran talks: Negotiations in Switzerland have yielded progress. The parties agreed to establish a special communication line to avoid conflicts when vessels pass through the strategic Strait of Hormuz. Additionally, both countries pledged to guarantee the territorial integrity of Lebanon.
• Negotiations: So far, issues regarding the unfreezing of Iranian assets and matters concerning Iranian oil exports have been settled.
• Mixed message from Donald Trump: Trump commented that a lot of oil is flowing out of the Strait of Hormuz and commodity prices have dropped significantly. However, he warned that the US has full control over the strait and can instantly restore the blockade if Iran fails to comply with the terms of the agreement.
• Iran's funds: The Governor of the Central Bank of Iran informed that the unfrozen funds will not be allocated exclusively to essential goods. Tehran will be able to purchase other non-sanctioned goods, although it is not obligated to purchase agricultural products from the US.

📈 Stock Market

• Cooling of the AI rally: US indices retreated from record highs. The Nasdaq Composite dropped by 1.3%, with rising US bond yields also dampening sentiment, fueling further strengthening of the US dollar. We are currently observing a drop in US100 futures of nearly 1.2%.
• Declines in Asia: Asian stock markets, particularly in South Korea, followed suit, losing ground due to a sell-off of chipmakers' stocks. The KOSPI index is down by as much as 6%, while in Japan, where the yen sell-off continues, the Nikkei 225 lost 1.62%. Some Chinese markets are closed today due to a holiday.
• Sharp 16% drop in SpaceX: Elon Musk's company valuation fell below the closing price of its first day of public trading. The reason is the announcement of aggressive borrowing, as the company is issuing investment-grade bonds for the first time to finance its massive ambitions in the area of AI infrastructure, despite signing a multi-billion contract for the delivery of computing power to Reflection AI.
• Alphabet under pressure: The giant's shares suffered greatly following the news that John Jumper, Vice President of Google DeepMind and 2024 Nobel Laureate in Chemistry, is leaving the company for the competitor, Anthropic.

📊 Macroeconomics and Currencies

• Japan (Flash PMI): The data turned out better than expected. The manufacturing index rose to 54.9 pts (previously 54.5), and the Composite index jumped to 52.5 pts (previously 51.1), indicating a solid economic recovery.
• Australia (Flash PMI): The results were mixed. Manufacturing is doing well and is expanding at a rate of 52.1 pts, but the service sector remains in recessionary territory, recording 49.9 pts.
• EURUSD is trading around last week's lows, close to 1.14, while USDJPY is rising toward 162, despite attempts at verbal intervention by Japanese authorities. 

🔭 What to watch today?

• Cautious open in Europe: Futures contracts suggest a nervous opening session in Europe after the tech sell-off on Wall Street and in Asia. The DE40 index is down 0.6%, while UK100 is losing 0.7%.
• Further tensions in the Middle East: Investors will monitor whether the drop in oil prices will hold in the face of diplomatic progress, which may bring relief to transport companies but hit the energy sector. Brent oil prices are currently relying on last week's supports around the 200-period moving average.
• Pressure on Big Tech: Key will be the performance of the semiconductor sector and AI-related companies. The market will test whether yesterday's sell-off of Alphabet and SpaceX is just temporary profit-taking or a deeper correction of an overvalued sector. There is increasing talk in the markets about the massive indebtedness of tech companies and debt growing faster than revenue or even profits.
• Political backdrop: Investors will also slowly start to position themselves ahead of future macroeconomic events. The schedule for Congressional hearings has been announced, where Fed Chairman Warsh will testify on July 14.