Fed Split Holds. Iran Signals Talks. SK Hynix Soars. Bitcoin Holds Above $62,700.

Nasdaq 100 futures gained 0.6%. S&P 500 futures rose 0.2%. Dow futures were little changed. The VIX eased back toward 17 after briefly approaching 19 on Wednesday. Treasury yields were steady. The dollar slipped 0.1%.

The biggest move came from the Fed.

Minutes from the June 16 to 17 meeting showed officials were divided over the next rate move. A few participants argued there was already a case for raising rates in June. Others preferred waiting for more inflation data. Every official ultimately voted to leave rates unchanged at 3.50% to 3.75%.

The geopolitical picture also softened.

President Trump said Iran had reached out seeking a deal after the latest round of U.S. strikes. He added it remained unclear whether both sides were moving back toward war or negotiations. U.S. Central Command said it struck about 90 Iranian targets overnight. Iran responded with attacks on U.S. bases in Bahrain and Kuwait, though markets largely treated the exchange as contained.

Asia recovered.

South Korea's Kospi gained 0.62% after Wednesday's bear market close. Samsung Electronics rose 0.18%. SK Hynix climbed 5.3% ahead of today's Nasdaq pricing. Japan's Nikkei gained 1.38%.

The Signal

Markets are treating the military escalation as temporary. The Fed's inflation message looks more durable.

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Brent traded below $77.85 while WTI held near $73.30. Both remain well above June levels despite easing overnight.

The physical market remains under pressure.

Windward Maritime said shipping through the Strait of Hormuz is now operating under full conflict conditions. Vessel traffic slowed sharply after this week's attacks despite prices stabilizing.

Inventory data also remains tight.

U.S. crude inventories increased by 3 million barrels last week but remain about 6% below the five year average. Gasoline inventories are also 6% below average. Distillate inventories remain 12% below normal seasonal levels.

Russia added another supply risk by extending its diesel export ban through the end of July after repeated Ukrainian drone attacks damaged refinery capacity.

Energy Signal

Oil prices eased. Shipping conditions did not. The physical market remains tighter than the futures market suggests.

Officials agreed inflation risks remain elevated while labor market risks have eased since earlier this year.

Several participants discussed a scenario where AI investment, higher energy prices and tariffs combine to keep inflation above target. Most agreed additional policy tightening would likely be needed if that outcome develops.

Markets adjusted accordingly.

The 10 year Treasury yield held near 4.57%. The 2 year stayed around 4.20%. Gold recovered above $4,100 as the dollar weakened slightly.

Rate futures continue pricing one to two quarter point hikes before year end.

The next major test arrives July 14.

Fed Chair Kevin Warsh testifies before Congress the same day June CPI is released.

Another structural issue continues building underneath inflation.

U.S. data center capacity is expected to grow from roughly 24 gigawatts today to about 110 gigawatts by 2030. Transformer lead times now exceed three years while equipment prices are expected to rise another 4% to 10%.

Macro Signal

The Fed minutes strengthened the case for another hike. Higher energy prices only reinforce that risk.

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The broader AI trade continues to split.

Amazon (AMZN) successfully raised $25 billion through a bond sale, though demand reached only about 1.6 times the offering size, below recent technology deals.

Meanwhile semiconductor valuations continue resetting.

About 69% of technology stocks in the S&P 500 now trade at least 20% below their 52 week highs. Micron (MU) has fallen 25% from its peak. Broadcom (AVGO) is down 21%. Marvell (MRVL) has lost 30%.

Earnings season begins next week.

Technology earnings are expected to grow 65.5% from a year ago while overall S&P 500 earnings are projected to rise 23.4%.

Capital Signal

Capital continues flowing into AI memory. Financing the next stage of AI infrastructure is becoming the harder trade.

ETF flows weakened again.

Spot Bitcoin ETFs recorded $85 million of net outflows Wednesday, ending a three day inflow streak worth about $509 million. BlackRock's IBIT lost $59 million while Fidelity's FBTC saw $15 million leave.

Ethereum continued outperforming.

Spot Ether ETFs attracted another $70 million of inflows, extending their winning streak to five sessions.

The long term supply story remains supportive.

Santiment estimates Bitcoin balances on centralized exchanges have fallen to their lowest level since 2017. Ethereum balances sit at their lowest since 2015.

Institutional ownership continues rising.

Spot Bitcoin ETFs now hold roughly 641,400 BTC while public companies own about 1.26 million BTC.

Two infrastructure stories also moved forward.

Swift launched a blockchain shared ledger pilot with 17 banks, including Citigroup (C), HSBC (HSBC) and UBS (UBS). INTERPOL concluded Operation First Light with 5,811 arrests across 97 countries and intercepted about $293 million linked to financial crime.

The Verdict

ETF flows paused again. Institutional adoption continues expanding beneath the surface.

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Thursday opens with markets separating headlines from trends.

Military tensions remain elevated, yet futures recovered. Oil eased. Bitcoin held its range.

The bigger change came from the Fed.

Officials openly discussed another rate hike if AI demand, tariffs and higher energy prices keep inflation elevated.

The next tests are already approaching.

SK Hynix prices today. Earnings season begins next week. Warsh testifies alongside June CPI on July 14.

Markets moved past the geopolitical shock in one session.

The inflation debate is likely to stay much longer.