Market Update: Oil Surges on Mideast Tensions; Fed Fights Rates; Tech Beats

Geopolitical tensions are escalating in the Middle East, leading to a surge in oil prices, while the Federal Reserve experienced a significant internal division over its latest interest rate decision.

• U.S. forces conducted heavy strikes against Iran, retaliating for missile attacks and significantly escalating Middle East tensions, driving Brent crude up 2.09% to $92.64 a barrel and U.S. WTI up 1.46%.
• The Federal Reserve opted to hold interest rates steady at 3.5%-3.75% in a notable 9-3 split decision, with Chairman Kevin Warsh describing it as a “family fight” among board members.
• Following the Fed’s announcement, the 30-year Treasury yield surged to its highest level since 2007, while the 2-year Treasury yield fell. Analysts raised concerns about Chairman Warsh’s credibility due to a perceived lack of reasoning for maintaining rates amid inflation.
• Samsung Electronics reported another quarter of record operating profits, primarily driven by robust AI demand which continues to fuel growth in its memory chip business, achieving all-time high DRAM and NAND sales.
• Chinese AI supplier Zhongji Innolight made its market debut in Hong Kong, experiencing a lukewarm reception with shares falling 2.3% after pricing its initial public offering below the maximum indicated price, marking Asia’s second-largest listing this year.
• Europe’s increasingly extreme summers pose a growing economic challenge, with frequent heatwaves and widespread wildfires in France and Spain causing significant disruptions, driving up costs, and weighing on regional growth.