Good morning! The last few days have been a timely reminder that markets rarely do what even the most well-paid forecasters expect. There’s no war and the Nasdaq 100 hit a new record high.

But oil prices stand out as the biggest narrative-breaker.

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Falling crude

A week ago, some of the most prominent forecasters on Wall Street, including Goldman Sachs, were predicting oil would soon change hands for $100 a barrel. 

Yet on Tuesday, Brent crude, the international benchmark, declined more than 5% for the second day in a row and hovered near $67 a barrel.

That’s roughly in line with the price of oil before Israel’s strike on Iran on June 13. 

The global oil benchmark had climbed to $79 on June 19, though it collapsed following the US strike on Iran’s nuclear facilities and remained depressed after Iran’s retaliatory strike and the subsequent peace deal. 

The 12-day conflict led many pundits to predict a surge in energy prices.

If that had happened, it would have complicated the Federal Reserve’s inflation battle, which has already come under scrutiny in recent months from market-watchers including President Trump and our team at Opening Bell Daily. 

“Brent crude oil working on its worst 3-day decline since COVID and before that, the worst since December 2008,” wrote Kevin Gordon, senior investment strategist at Charles Schwab, in a post on X Tuesday alongside the following chart:

Strategists have warned that, in a worst-case scenario, Iran could have chosen to shut down the Strait of Hormuz, the narrow passage responsible for roughly 20% of the world’s oil supply. 

That appears to be off the table for now, which means traders can carry on without fearing a supply disruption. 

“The prospect of severe economic fallout from a potential blockade likely motivated both sides to agree to the ceasefire, if it is indeed genuine,” Mukesh Sahdev, global head of commodity markets at Rystad Energy, wrote in a note. 

For what it’s worth, Fed researchers have estimated that each $10 per barrel increase in oil raises US inflation by about 0.2%. It also drags on economic growth by 0.1%. 

That means, according to the Fed’s own calculations, an energy-fueled inflation rebound no longer poses a threat. 

Market snapshot

Elsewhere

🤝 The Iran-Israel truce is holding. The two countries reportedly broke the deal initially, which President Trump was angered by, and now the peace appears to be back in place. The deal remains fragile, and the focus now turns to nuclear diplomacy. (Bloomberg)

📊 Nvidia CEO sells $15 million in stock. Jensen Huang sold 100,000 shares of Nvidia on Friday and Monday, SEC filings show. It’s the first move in his plan to sell 600,000 shares of stock through the end of the year, which would be worth about $873 million. (CNBC)

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🏦 Jerome Powell continues testifying today. The Fed Chair said Tuesday policymakers are still in wait-and-see mode, and that he’s still open to the idea that pass-through inflation will be less than expected from tariffs. (Bloomberg)

Rapid-fire

• Carnival shares jumped 7% after beating earnings and raising its full-year outlook (CNBC)

• Oil prices have collapsed to lower prices than before the Israel-Iran conflict began (CNN Business)

• Conference Board’s consumer confidence index unexpectedly fell to 93 from 98.4 in May (WSJ)

• Shares of Circle fell more than 15% following its 700% rally since its IPO (Yahoo Finance)

• The US dollar weakened near a three-year low (Investing.com)

• Cynicism is a strange status symbol in finance and media (Blog)

• Wall Street’s fear gauge tumbled on Tuesday as fears of a prolonged Iran conflict receded (WSJ)

Beyond the news

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Last thing

About me

📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

I write our flagship newsletter to prepare you for each trading day — unpacking markets, economic data and Wall Street with analysis you won’t find anywhere else.

Feedback? Reply to this email, ping me on X @philrosenn, or write me directly at [email protected].