Trump Declared the Iran Ceasefire Over. Oil Surged Past $75. Your CPI Thesis Just Broke.
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Iran Escalation • Before the Bell
Trump Says Iran Deal Is “Over.” Futures Down 700. Oil Past $75.
The ceasefire lasted 14 days. U.S. forces struck 80 Iranian sites overnight. Treasury revoked the oil sales waiver. The oil discount that was filling your tank just evaporated. The CPI calculus for July 14 reversed.
Wednesday, July 8, 2026 • Dow futures −705 • Oil +6% • Fed minutes at 2 PM ET
Key Idea
President Trump told the NATO summit in Ankara this morning that the Iran memorandum of understanding is “over.” Dow futures dropped 705 points. Brent crude surged 6% past $78. WTI jumped to $75. Last week oil was at $67 and the ceasefire was pulling prices toward $60. This morning the ceasefire is gone. The Treasury revoked its waiver authorizing Iranian oil sales. The wind-down deadline is July 17. The Fed releases its June meeting minutes at 2 PM today. Everything happening before the bell this morning makes those minutes more important, not less.
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What Happened Overnight
Tuesday afternoon, Iran attacked three commercial vessels transiting the Strait of Hormuz. One was a Qatari LNG tanker. The Strait handles roughly 20% of the world’s oil traffic. The U.K. Maritime Trade Operations Center raised the threat level to “severe.”
The U.S. responded with force. CENTCOM launched strikes against more than 80 Iranian sites. That includes air defense systems, command and control networks, coastal radar, anti-ship missiles, and over 60 IRGC small boats. This was not a warning shot. This was the largest single U.S. strike package against Iran since the conflict began.
Then the Treasury Department revoked General License X. That is the sanctions waiver issued two weeks ago as part of the interim peace deal. It had authorized Iranian oil sales on the global market. The new license, General License X1, blocks all new sales immediately. Transactions already in progress must wind down by July 17.
This morning in Ankara, Trump told reporters at the NATO summit that the ceasefire is “over.” NATO Secretary General Rutte backed the strikes, calling them “absolutely necessary.”
Dow futures are down 705 points. S&P 500 futures are down 1%. The Nasdaq touched a four-week low. European markets are down 1.8%. Every Asian index closed lower. Brent crude is trading above $78. WTI is above $74.
The U.S. responded with force. CENTCOM launched strikes against more than 80 Iranian sites. That includes air defense systems, command and control networks, coastal radar, anti-ship missiles, and over 60 IRGC small boats. This was not a warning shot. This was the largest single U.S. strike package against Iran since the conflict began.
Then the Treasury Department revoked General License X. That is the sanctions waiver issued two weeks ago as part of the interim peace deal. It had authorized Iranian oil sales on the global market. The new license, General License X1, blocks all new sales immediately. Transactions already in progress must wind down by July 17.
This morning in Ankara, Trump told reporters at the NATO summit that the ceasefire is “over.” NATO Secretary General Rutte backed the strikes, calling them “absolutely necessary.”
Dow futures are down 705 points. S&P 500 futures are down 1%. The Nasdaq touched a four-week low. European markets are down 1.8%. Every Asian index closed lower. Brent crude is trading above $78. WTI is above $74.
What Yesterday Already Broke
Before the strikes, Tuesday was already a down day. The Dow closed at 52,925 after hitting another intraday record and reversing. The S&P 500 fell 0.45%. The Nasdaq dropped 1.16%.
SpaceX fell 6.83% on its first day in the Nasdaq-100. The stock dropped below its $135 IPO price. Early investors used the inclusion to offload shares into forced index-fund buying. We told you yesterday that history says the average Nasdaq-100 addition loses 3.4% in its first five days. SpaceX doubled that in one session.
Samsung’s 19x profit beat triggered a 4.9% selloff in the Korean KOSPI. That spilled into U.S. chips. SMH fell 3%. Micron dropped 4.7%. Broadcom, AMD, and KLA all declined.
And Reuters reported that China’s DeepSeek is developing its own AI inference chip. That is the Chinese AI lab that shocked Silicon Valley last year with its low-cost models. The chip would reduce DeepSeek’s reliance on Nvidia and Huawei. It would be manufactured by SMIC, China’s largest foundry. The project is early-stage but the signal is clear: every major AI lab is now trying to own its own silicon. OpenAI unveiled Jalapeno last month. Anthropic is weighing the same move.
SpaceX fell 6.83% on its first day in the Nasdaq-100. The stock dropped below its $135 IPO price. Early investors used the inclusion to offload shares into forced index-fund buying. We told you yesterday that history says the average Nasdaq-100 addition loses 3.4% in its first five days. SpaceX doubled that in one session.
Samsung’s 19x profit beat triggered a 4.9% selloff in the Korean KOSPI. That spilled into U.S. chips. SMH fell 3%. Micron dropped 4.7%. Broadcom, AMD, and KLA all declined.
And Reuters reported that China’s DeepSeek is developing its own AI inference chip. That is the Chinese AI lab that shocked Silicon Valley last year with its low-cost models. The chip would reduce DeepSeek’s reliance on Nvidia and Huawei. It would be manufactured by SMIC, China’s largest foundry. The project is early-stage but the signal is clear: every major AI lab is now trying to own its own silicon. OpenAI unveiled Jalapeno last month. Anthropic is weighing the same move.
What 2 PM Decides
The Federal Reserve releases minutes from its June meeting this afternoon at 2 PM Eastern. That is the meeting where Warsh held rates steady at 3.50–3.75%.
Those minutes were written before oil surged $8. Before Trump declared the ceasefire over. Before Iran attacked three tankers. The discussion inside them reflects a world where the ceasefire was holding and oil was falling. That world no longer exists.
Here is why the minutes still matter. They will reveal how many members were leaning toward a rate cut versus a hold. If the committee was close to cutting, then the Iran escalation pushes that timeline further away. If they were solidly on hold, the market can price in patience. Either way, the 10-year yield at 4.56% this morning tells you the bond market is already adjusting.
The CME FedWatch tool shows a 72.7% chance rates stay unchanged in July. That was 85% two days ago. The market is starting to price in a new risk. Oil above $75 changes the inflation math before the July 14 CPI even prints.
Those minutes were written before oil surged $8. Before Trump declared the ceasefire over. Before Iran attacked three tankers. The discussion inside them reflects a world where the ceasefire was holding and oil was falling. That world no longer exists.
Here is why the minutes still matter. They will reveal how many members were leaning toward a rate cut versus a hold. If the committee was close to cutting, then the Iran escalation pushes that timeline further away. If they were solidly on hold, the market can price in patience. Either way, the 10-year yield at 4.56% this morning tells you the bond market is already adjusting.
The CME FedWatch tool shows a 72.7% chance rates stay unchanged in July. That was 85% two days ago. The market is starting to price in a new risk. Oil above $75 changes the inflation math before the July 14 CPI even prints.
The CPI Calculus Just Flipped
Friday’s thesis was simple: oil falling 28% from its May peak would show up in the July 14 CPI. Lower energy costs would weaken Warsh’s case for elevated rates. That was true when oil was at $67. Oil is now above $75. An $8 move in six days. If Brent stays above $75 through CPI week, the headline inflation number will not drop as far as the market expected. The rate-cut thesis that powered Thursday’s Dow record is under direct threat. One geopolitical event just rewrote the macro calendar.
Three Scenarios for Today
Base
Markets open down 1–1.5%. Oil holds $73–78. Energy stocks rally: Chevron, Exxon, ConocoPhillips gain 2–4%. Chips extend their selloff. SMH drops another 2–3%. Fed minutes at 2 PM show a committee solidly on hold, which steadies the session. The S&P 500 closes down 0.7–1.2%. The 10-year holds 4.50–4.60%. Defensive rotation accelerates into XLV and XLU. If you own energy underweight, this is the morning to add.
Upside
Iran signals de-escalation before the open. Oil reverses from $78 to $72–73. Trump’s “over” comment gets walked back by advisors. Fed minutes reveal dovish leanings, re-anchoring the rate-cut trade. The Dow recovers half its premarket losses by close. Defense stocks rally: LMT, RTX, NOC gain 3–5% regardless of outcome. Energy stays bid. The VIX spikes above 20 but settles below 18 by 4 PM.
Risk
Iran retaliates further. Strait of Hormuz closes to commercial traffic again. Oil breaks above $80. Fed minutes reveal hawkish surprise with members discussing rate hikes. The 10-year pushes past 4.65%. The S&P 500 drops 2–3% in a single session. The VIX spikes above 22. Growth and tech lead the decline. SPCX falls below $120 as new QQQ holders panic. This becomes the worst day since the April tariff scare. A 5–7% correction from the July 6 high becomes the base case by Friday.
Our View
We told you Friday that oil below $68 was the peace dividend arriving at your gas station. That lower-cost energy would flow into a softer CPI. That the deployer-over-builder thesis was the trade.
The first two calls just got complicated. Oil surged $8 in two days. The ceasefire that reopened the Strait lasted exactly 14 days. Trump declared it over from Ankara this morning. The Treasury revoked Iran’s oil sales waiver. The U.S. struck 80 sites. The peace dividend is not delayed. It is gone.
Here is what did not change. The labor market is still soft. The 57,000 jobs print is still the data. Warsh is still not giving forward guidance. The deployer-over-builder thesis is still intact. What changed is the inflation variable. Oil above $75 threatens to keep headline CPI sticky enough to prevent the rate-cut conversation from starting.
If you are overweight tech and underweight energy, today is the rebalance. Exxon, Chevron, and ConocoPhillips are all up premarket. Defense names lead any escalation. XLE is the trade. The Fed minutes at 2 PM are the next data point. Read them for how close the committee was to cutting. That distance tells you how far away relief is now.
The second half just got its first real test. Position accordingly.
The first two calls just got complicated. Oil surged $8 in two days. The ceasefire that reopened the Strait lasted exactly 14 days. Trump declared it over from Ankara this morning. The Treasury revoked Iran’s oil sales waiver. The U.S. struck 80 sites. The peace dividend is not delayed. It is gone.
Here is what did not change. The labor market is still soft. The 57,000 jobs print is still the data. Warsh is still not giving forward guidance. The deployer-over-builder thesis is still intact. What changed is the inflation variable. Oil above $75 threatens to keep headline CPI sticky enough to prevent the rate-cut conversation from starting.
If you are overweight tech and underweight energy, today is the rebalance. Exxon, Chevron, and ConocoPhillips are all up premarket. Defense names lead any escalation. XLE is the trade. The Fed minutes at 2 PM are the next data point. Read them for how close the committee was to cutting. That distance tells you how far away relief is now.
The second half just got its first real test. Position accordingly.