Morning Report | Hormuz risk bid in crude, retailers rebut bears
$SPY Hormuz risk lifts energy $M earnings beat, guidance raised $ULTA beat-and-raise, demand holds $QQQ AI review framework clouds sentiment $HPE servers and connectivity catch bid
Market Pulse
U.S.-Iran War
3 events
Hormuz mining claims and renewed strikes keep Gulf shipping risk elevated, lifting crude while OECD flags a growth-and-inflation downside if disruption persists.
Last 24 hours
Marco Rubio told the Senate Iran has mined large segments of the Strait of Hormuz and fired on commercial ships; a White House official said the Pentagon destroyed numerous mines and over 40 minelaying vessels.
Oil rose on heightened conflict risk as talks reportedly continued; U.S. Central Command said it defeated multiple Iranian missiles and drones and conducted defensive strikes including on a facility on Qeshm Island near the strait.
OECD cut its outlook and said its baseline assumes Gulf energy and shipping disruption eases by mid-year; a prolonged Hormuz disruption with broader infrastructure damage into 2027 could cut 2026 growth to 2.1% and lift inflation through 2027.
Market reaction
Crude rallied on the escalation risk: WTI July +2.1% to $95.76 and Brent August +2.0% to $97.86.
Our view
Disruption gradually eases by mid-year, keeping crude volatile but avoiding a sustained shock to broader risk assets. Watch evidence of effective mine clearance and whether U.S.-Iran communications translate into reduced attacks on shipping; prolonged Hormuz impairment would raise inflation pressures and force cross-asset repricing.
What could change our view
Mines and threats persist, delaying normalization of tanker traffic and insurance costs.
Escalation drives prolonged Hormuz disruption plus broader Gulf energy-infrastructure damage into 2027.
Tickers: $SPY, $CL=F
U.S. Retail
3 events
Retail earnings beats from Macy’s, Ulta, and Victoria’s Secret are lifting guidance and challenging the bearish promo-and-demand narrative into Q2.
Last 24 hours
Macy’s reported Q1 comparable sales up 3.0% overall and raised FY2026 sales to $21.5B–$21.75B and EPS to $2.00–$2.20, citing momentum in ~200 “reimagined” stores.
Ulta posted a fiscal Q1 beat with comparable sales up 5.3% and net sales up about 11% y/y, then lifted full-year EPS to $28.36–$28.80 while reaffirming revenue and same-store-sales outlook.
Victoria’s Secret beat in fiscal Q1 with comps up 13% and raised FY sales to $7.03B–$7.13B and adjusted operating income to $550M–$580M, pointing to fewer promotions and lower expected tariff rates.
Market reaction
Ulta shares rose as much as ~7% in extended trading after results and higher FY EPS guidance, while Victoria’s Secret jumped 47% on the Q1 beat and raised full-year outlook.
Our view
The print-driven setup stays constructive for discretionary retail/beauty as guidance raises and full-price mix signal better near-term earnings durability. The key monitor is whether Q2 trend commentary and tariff-rate assumptions hold, with consumer sensitivity to gasoline prices and broader uncertainty the main swing factor.
What could change our view
Q2 demand softens and promotions re-accelerate, eroding margin leverage signals.
Tariff-rate benefits reverse or fail to translate into sustained cost relief.
Tickers: $M, $ULTA, $VSCO
AI
3 events
AI trade split between fresh US pre-release review framework and explosive hardware upside, with servers and connectivity catching bid into the open.
Last 24 hours
President Trump signed an AI executive order creating a voluntary, up to 30-day pre-release government review for certain powerful models; agencies have 60 days to detail implementation.
The order tasks Treasury with an AI vulnerability “clearinghouse” and assigns NSA the final call on which models merit extra scrutiny after classified standards are drafted across multiple agencies.
HPE posted adjusted EPS $0.79 vs $0.53 expected and revenue $10.68B vs $9.79B, with server revenue $5.45B vs $4.66B; MRVL surged 32.52% after Nvidia’s CEO praised it publicly and cited connectivity as a key AI bottleneck.
Market reaction
AI hardware led the tape Tuesday: HPE gained 19% (best day ever) after the earnings beat, and MRVL jumped 32.52% (largest one-day gain on record), lifting sentiment across AI networking/connectivity and broader semis exposure (SMH/SOXX).
Our view
Continued near-term support for AI infrastructure equities as server and connectivity demand/pricing narratives stay in focus, while the new AI review framework remains a manageable overhang given its voluntary structure. Next key monitor is the 60-day agency implementation detail and whether upcoming prints validate orders/backlog momentum.
What could change our view
Implementation shifts from voluntary reviews toward binding disclosure or stricter thresholds.
Orders/backlog data signal demand pull-forward and a faster-than-expected AI hardware slowdown.
Tickers: $QQQ, $HPE, $MRVL
Macro & Policy Digest
Ukraine’s drone strikes near St. Petersburg revive Baltic energy infrastructure risk, keeping crude’s geopolitical premium in focus into today’s open.
Last 24 hours
Ukraine said long-range drones hit a St. Petersburg oil terminal, sparking a fire, and targeted Kronstadt naval base; airport flights were briefly restricted with 30+ delays/cancellations reported.
Our view
The headlines lift near-term crude and product risk premium without confirming a durable supply shock. The trade hinges on independent verification of damage and any disruption to Baltic export, storage, or refining logistics over the next 24–72 hours.
What could change our view
Verified terminal or logistics damage causing sustained export or delivery interruptions.
Rapid containment and repairs that remove the Baltic infrastructure risk narrative.
Tickers: $CL=F
USTR floats Section 301 forced-labor tariffs covering 60 economies, setting up a summer comment process that could extend trade-policy uncertainty.
Last 24 hours
USTR issued a proposed Section 301 determination to add forced-labor-related tariffs on imports from 60 economies, with 10% for certain economies and 12.5% for others; comments due July 6 and a hearing starts July 7.
Our view
Near-term market impact stays contained because this is a proposal with a defined notice-and-comment runway, but it lifts the probability of incremental tariff actions into summer talks. Monitor the July 6 comment deadline and July 7 hearing for signals on scope, exemptions, and the likelihood of follow-on 301 steps.
What could change our view
Tariffs are accelerated or broadened materially beyond the current proposal.
Major carve-outs or lower-rate treatment materially dilute the effective tariff impact.
Tickers: $SPY
Bitcoin slid to the mid-$60Ks amid forced long liquidations and record ETF outflow streak pressuring crypto-linked equities into the open.
Last 24 hours
Bitcoin fell as low as ~$65,385 (-2.3%) after breaking below $70,000, alongside ~$594M in 24-hour long liquidations and an 11th straight day of bitcoin ETF net outflows.
Market reaction
Ether was down 4.7% in the June 2 snapshot, while crypto-linked equities sold off with Strategy -9%, Galaxy -5.9%, and Coinbase -4.7% alongside bitcoin’s drop to ~$65,385.
Our view
Crypto stays risk-off near term with BTC probing support as ETF outflows and deleveraging persist, keeping IBIT and related equities under pressure. Monitor whether BTC holds ~$65,000 and whether the ETF outflow streak breaks; stabilization there would reduce downside momentum.
What could change our view
ETF outflows reverse to sustained inflows, flipping flows-driven pressure.
Break below ~$65,000 accelerates toward $63–64K or $62K supports.
Tickers: $IBIT
CFTC approval of bitcoin perpetual futures on Kalshi sparks structural fee fears driving sharp selloff across major US exchange operators.
Last 24 hours
The CFTC approved bitcoin perpetual futures for trading on Kalshi, fueling investor concern that perps could expand beyond crypto into equity index and other benchmark contracts as Kalshi signals broader ambitions.
Market reaction
In Tuesday’s session, exchange operators sold off sharply: CBOE fell 8%+, NDAQ 5%+, CME 2%+, and ICE 1%+. CME was down 8%+ over two days and CBOE was down 17%+ for the week.
Our view
Exchange stocks stay under pressure as investors price a credible path for CFTC-approved perps to compete with incumbent benchmark futures franchises. The key monitor is whether the same approval route is extended beyond bitcoin and how quickly new perp listings move toward equity index or other high-volume contracts.
What could change our view
Perps gain regulatory clearance beyond bitcoin into equity index and benchmark futures.
CFTC or market structure constraints limit perp scope, easing fee and volume concerns.
Tickers: $CME
Evergreen private-market liquidity fears resurface after Partners Group gates withdrawals, pressuring U.S. alternative managers premarket amid valuation-mark scrutiny.
Last 24 hours
Partners Group capped redemptions in its $8.6B Global Value SICAV at 5% of NAV after requests hit 9.8% of NAV; the vehicle represents about 4.8% of firm assets.
Market reaction
Partners Group shares fell about 16.6% to a reported 52-week low; U.S.-listed alternative managers were indicated lower premarket in sympathy, including KKR ~-4.7%, Blackstone ~-3.9%, Carlyle ~-3.1%, Blue Owl ~-2.7%, and Ares ~-2.5%.
Our view
Sentiment stays cautious across alts as investors reprice liquidity/valuation risk in semi-liquid structures, keeping near-term multiple pressure on BX/peers despite durable fee franchises. Monitor for additional gates or suspensions and any knock-on to fundraising or AUM growth expectations, which would be the clearest catalyst for broader de-risking.
What could change our view
Further withdrawal limits across evergreen funds trigger sharper fundraising and AUM downgrades.
Stabilizing redemptions and improved liquidity terms quickly reverse sector risk premium.
Tickers: $BX
Company Events
PANW earnings beat and raised guidance highlight AI-driven cybersecurity demand, but acquisition-related losses keep profitability scrutiny high.
Last 24 hours
Palo Alto Networks reported fiscal Q3 ahead of expectations and guided fiscal Q4 revenue above consensus, lifted full-year revenue outlook, and posted a net loss tied to acquisition impacts and investment pace.
Market reaction
PANW traded up about 12% after-hours initially, then gave back gains toward flat in late trading.
Our view
That PANW’s raised outlook supports a constructive near-term read-through for cybersecurity spending, while the stock’s follow-through depends on clearer profitability normalization. Monitor whether investment and acquisition integration costs fade fast enough to prevent guidance-driven optimism from being discounted.
What could change our view
Acquisition and investment costs persist, delaying margin recovery and confidence in earnings quality.
AI-driven urgency proves transient, weakening bookings momentum and forward revenue visibility.
Tickers: $PANW
Novo starts Wegovy pill rollout in the UAE after approval, marking its first ex‑U.S. launch and pulling forward international commercialization.
Last 24 hours
• Novo Nordisk began selling the Wegovy pill in the UAE after Emirates Drug Establishment approval for weight management and cardiovascular risk reduction, accelerating its previously signaled 2H 2026 ex‑U.S. launch timeline.
Our view
We view the UAE launch as a constructive but modest read-through for NVO, reinforcing a tangible path to broaden Wegovy pill revenues beyond the U.S. Key next monitor is whether additional market approvals and launches follow quickly enough to lift the pill’s currently small contribution (~3% of Q1 sales) amid intensifying oral competition.
What could change our view
Follow-on ex‑U.S. approvals slip, leaving UAE as a one-off rollout.
Oral GLP-1 pricing or uptake disappoints, limiting revenue leverage versus injectables.
Tickers: $NVO
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