Public Markets 3 Days

Last updated: July 1, 2026, 5:30 PM ET

Global Markets Overview

Global equities ended modestly lower as Federal Reserve Chairman Kevin Warsh dodged questions about interest rates, leaving traders searching for clues on monetary policy. The S&P 500 closed down as weakness in tech shares weighed on the Nasdaq, offsetting gains in financials and consumer discretionary sectors. This comes as the market braces for the upcoming jobs report, with Treasury yields rising ahead of the data release. Meanwhile, European Central Bank officials offered diverging views on the next rate move, with some seeing a lower likelihood of further hikes due to falling inflation and oil prices as the Iran war impact eases, while others suggested one more hike might still be reasonable to ensure inflation returns to target.

M&A and IPOs

The mergers and acquisitions market is poised to remain strong in the second half, driven by a wide range of deal types adapting to economic shifts, particularly those influenced by the rise of artificial intelligence. Mega takeovers have already propelled dealmaking to a record $2.8 trillion. In the IPO market, Italian tech group Bending Spoons soared 40% on its Nasdaq debut, raising $1.68 billion in one of Europe's largest tech offerings this year. Separately, Uber-backed scooter group Lime climbed 4% after its initial public offering, raising $174 million. However, Franco-German tank maker KNDS postponed its IPO, citing market conditions after investors balked at its €12 billion-plus valuation.

Corporate Earnings and Performance

British American Tobacco Plc is slashing 9,000 jobs, about one-fifth of its global workforce, as part of an aggressive cost-reduction and simplification program. General Mills is focusing on new products and marketing, particularly in protein and pet food, to win back thrifty consumers amidst rising costs and price reductions. In the tech sector, server maker Supermicro's Taiwan offices were raided as part of a chip smuggling probe, causing its shares to fall approximately 8%. Chip stocks, however, are heading for their best quarter ever, fueled by AI demand, though recent volatility has introduced some swings.

Energy and Commodities

Crude oil futures extended their decline on supply optimism, with ships moving through the Strait of Hormuz and ongoing U.S.-Iran talks easing concerns. Key U.S. oil grades have fallen to a discount as crude flows increase and demand for American exports fades as the Iran war premium recedes. U.S. natural gas futures traded within a range, as hot weather boosted cooling demand, but abundant production and inventories kept a lid on price increases ahead storage data. Meanwhile, power bills for households in Singapore are set to hit a record due to the ongoing impact of the U.S.-Iran war, highlighting inflationary pressures.

Cryptocurrency and Digital Assets

President Donald Trump and his family have reaped substantial financial rewards from a memecoin that resulted in losses for hundreds of thousands of investors, with his accounts receive a $250 million from chip maker Micron. Financial disclosures reveal Trump made over $1 billion on crypto deals in 2025, making him the largest U.S. crypto moneymaker unrivaled run presidential history. Bitcoin hoarder Strategy unveiled a $2 billion buyback plan as its share price tumbled, outlining reasons why it might sell crypto, a reversal of its prior pledge to hold as its share price tumbles.

Federal Reserve and Monetary Policy

Federal Reserve Chairman Kevin Warsh is tapping former Bank of England Governor Mervyn King to co-chair the central bank’s new task force on communications as market participants worry about volatility. Warsh has stressed the Fed's commitment to delivering price stability, noting that inflation now poses less risk than in recent weeks as it works to bring inflation to 2%. Citadel Securities warns that investors are underestimating Warsh's determination to fight inflation, which could drag on risk assets. This cautious outlook on Fed policy could lead to higher mortgage rates due to less guidance and increased volatility in mortgage bonds as the Fed tightens communication.

Economic Indicators and Trends

U.S. factory activity continued expand June, though the ISM purchasing managers' index saw a slight dip from May. In Europe, inflation has slowed more than anticipated as oil prices retreated, suggesting the region is becoming more resilient to economic shocks thanks to financial frameworks and green transition progress. However, Peru's inflation unexpectedly accelerated in June, remaining above the central bank's target due to rising food costs and the global energy shock as food prices climb. Argentina's bond rally may face headwinds from upcoming presidential elections, reviving concerns over the country's economic past according to BlackRock.

Technology and AI

The global financial community is sounding the alarm on artificial intelligence, with economists warning about potential fallout if the AI boom turns to bust as AI risks emerge. Companies are adjusting to economic shifts driven by AI, with mega takeovers contributing to a record $2.8 trillion in dealmaking. In synthetic biology, scientists have unveiled a cell known as Spud Cell, designed to power low-carbon factories and aid in the manufacture of everyday items through bioengineering. In a notable antitrust ruling, Google was ordered to pay nearly $2 billion to Klarna in Sweden after a court found the search giant favored its own price-comparison service over Klarna's.

Automotive and Transportation

U.S. car purchases and auto loans are being closely watched as the sector navigates economic shifts. Separately, the North American trade agreement, USMCA, is undergoing annual reviews as Washington opts not to renew the existing trade deal with Mexico and Canada opting for annual reviews. In the electric vehicle sector, Uber-backed Lime saw its shares climb after raising $167 million in its IPO. The operator of Lime electric scooters and bikes gained 4% after raising $174 million in its initial public offering. Brightline, the private Florida railroad, is hurtling towards a debt deadline of July 1 with no clear plan in place to address its obligations.

Energy Trading and Supply

Shell Plc is shuffling its energy trading leadership as David Wells retires after four years at the helm of a unit that is a key earnings driver for the company as leadership changes. Shell expects global liquefied natural gas flows to stagnate this year due to Middle East disruptions, with supply growth expected to rebound in 2027 Hormuz chokes supply. Thailand is considering investments in U.S. liquefied natural gas export projects to secure its energy supply, as the Southeast Asian importer looks to bolster its resources by investing in US LNG. Pakistan purchased an emergency LNG shipment for prompt delivery due to disrupted Qatari exports and tensions in the Strait of Hormuz as Qatar exports are disrupted.

Other Market Developments

The U.S. regulator is rethinking its oversight of the ETF industry, indicating a shift in how it manages the ETF landscape. In a significant legal development, two federal courts have blocked a new Trump administration rule that could have narrowed eligibility for a student loan forgiveness program for public servants challenging Medicaid work requirements. The Depository Trust & Clearing Corp. will conduct a rare double-settlement day after a significant number of erroneous trades occurred, forcing it to process two days of transactions. BlackRock's research arm has become cautious on emerging-market equities due to AI risks and is bullish on euro-area government bonds citing AI risks.