WS #13008

The dominant signal in this window is the Fed's July FOMC decision and Chair Warsh's press conference. The committee voted 9-3 to hold rates at 3.5%-3.75%, with three dissenters favoring a hike. Warsh struck a hawkish tone, emphasizing that the decision was 'the farthest thing from inertia,' that he is looking at a broader set of inflation data than just PCE, and that if inflation remains elevated, rates could be part of the solution. He also noted that the surge in AI capex makes the inflation judgment harder. Markets initially reacted positively, with SPY flipping green during the press conference. The 9-3 split and Warsh's hawkish rhetoric suggest a higher probability of a September hike, which is bearish for growth stocks and bullish for financials. Separately, the FTC lawsuit against Hims & Hers for allegedly sharing health data with Meta and Snap is a negative for HIMS and could pressure other digital health companies. The Iran-US geopolitical tension remains elevated, with oil prices spiking (WTI +6.96%, Brent +8.03%) after Trump vowed overwhelming force against Iran. This supports energy stocks (XOM, CVX) and is bearish for airlines and consumer discretionary. The narrative arc is ESCALATING on both the Fed hawkishness and geopolitical risk fronts.