Summary
🔴 Wednesday was a two-front risk-off session on Wall Street.
The Federal Reserve held rates steady, but three dissenting officials wanted a hike, and that hawkish split rattled a market already on edge.
Hours earlier, Iran fired missiles at American forces in the region and the U.S. and Saudi Arabia struck back at Iran-backed militias in Iraq, breaking a fragile ceasefire and sending oil sharply higher.
The chip-stock rout that has dogged the market all week deepened further, pushing the Nasdaq 100 into a technical correction.
After the closing bell, Microsoft and Meta Platforms delivered the session’s plot twist — one soared, one slumped — setting up a very different tone for Thursday.
Major Indices & Breadth
🔴 NYSE Composite closed at 23,944.97, -1.18%
🔴 S&P 500 closed at 7,316.15, -1.52%
🔴 Russell 2000 closed at 2,906.31, -1.61%
🔴 Nasdaq Composite closed at 24,442.94, -1.74%
🔴 Dow Jones closed at 51,594.14, down 1,153.18 points (-2.19%) — its worst single-day decline since April 2025
🟡 Sector breadth was narrow: Energy and consumer staples were among the only groups higher, while Industrials fell -3.42% and Technology dropped -2.36%
🔴 The Nasdaq 100 opened the session already down 10% from its June peak and extended losses, officially entering technical correction territory as the semiconductor selloff continued (see AI)
🟢 Leaders
XOM +3.24%
SHEL +2.56%
CVX +2.33%
🔴 Laggards
DE -4.52%
INTC -5.86%
CAT -6.91%
SNDK -7.31%
ARM -8.11%
AMD -8.15%
MU -9.46%
BE -11.34%
Earnings
🟢 Fortinet (FTNT) beat with adjusted EPS of $0.90 versus $0.75 expected on revenue of $2.05B versus $1.89B expected, and issued a Q3 forecast above consensus. Shares soared more than 12%.
🟢 Microsoft (MSFT) reported fiscal Q4 revenue of $90.01B, topping the $87.62B estimate. Azure grew 43% at constant currency, beating the 40.2% consensus, and full-year Azure revenue topped $100B for the first time. Shares jumped as much as 9% after hours.
🟢 Starbucks (SBUX) beat with adjusted EPS of $0.85 versus $0.66 expected, on global same-store sales growth of 7.9% versus 5.7% expected; revenue came in at $9.3B. The company raised its FY26 adjusted EPS outlook to $2.55–$2.65. Shares climbed 6% after hours.
🟢 Ford (F) topped earnings estimates and raised its 2026 outlook. Shares rose nearly 4% after hours.
🟢 Chipotle Mexican Grill (CMG) beat on the top and bottom lines and raised its full-year same-store sales outlook to low-single-digit growth from flat, despite flagging softer foot traffic tied to a lettuce-linked outbreak. Shares rose 3% after hours.
🔴 Procter & Gamble (PG) beat on adjusted EPS ($1.43 vs. $1.41 est.) but missed on sales ($21.203B vs. $21.379B est.) and guided FY27 GAAP EPS below estimates. Shares fell around 4%.
🔴 Meta Platforms (META) posted EPS of $6.18, missing estimates by roughly $1.04, as expenses jumped 55% to $42B against 28% revenue growth; net income fell 14% to $15.8B. Q3 revenue guidance of $61B–$64B came in light of the $63.15B estimate, and full-year 2026 capex guidance was raised to $130B–$145B. Shares tumbled almost 10% after hours.
🔴 Carvana (CVNA) issued full-year earnings guidance of $2.7B–$3.0B, below Wall Street’s expectations. Shares tumbled 14% after hours.
Additional notable earnings from Tuesday’s session (Boeing (BA), Coca-Cola (KO), Sherwin-Williams (SHW)) are not repeated here.
AI
🔴 Nvidia (NVDA) closed down -3.42% as the sector-wide chip selloff continued.
🔴 Intel (INTC) fell -5.86% and SanDisk (SNDK) dropped -7.31%.
🔴 Arm Holdings (ARM) slid -8.11% and Advanced Micro Devices (AMD) fell -8.15%.
🔴 Micron Technology (MU) led memory-chip losses, down -9.46%.
🔴 The selloff pushed the Nasdaq 100 into technical correction territory, down roughly 11% from its June record close (see Major Indices).
🟢 Against that backdrop, MSFT’s Azure results (see Earnings) offered a counter-narrative — hyperscaler demand still accelerating even as chip investors flee the trade.
🔴 Asian AI-supply-chain names extended losses overnight into Wednesday, with Samsung Electronics, SK Hynix, and SoftBank all falling further (see Foreign Markets).
Corporate
🔴 Deere (DE) dropped -4.52% on falling agricultural commodity prices and cautious guidance.
🔴 Caterpillar (CAT) tumbled -6.91% after an analyst downgrade.
🟡 Berkshire Hathaway (BRK.B) disclosed a record cash position of $397B, fueling speculation the conglomerate is bracing for a downturn.
🟢 Robinhood (HOOD) reported a tenfold jump in prediction-market revenue in the second quarter, driven by elevated volatility and trading volumes.
🟡 The FCC voted to ban imports of new foreign-made humanoid and quadruped robots and power inverters, citing cybersecurity and national-security concerns aimed primarily at China.
Market Structure
🟡 No U.S. index rebalancing, listing, or trading-mechanics changes of note today.
🔴 The Nasdaq 100’s move past the 10% decline threshold from its June record technically constitutes a correction (see AI) — a level that can trigger index-fund and options-related rebalancing flows in the sessions ahead, though no such mechanical event occurred today.
Macro/Policy
🔴 The Federal Reserve held its benchmark rate steady at 3.50%–3.75%, but three FOMC members dissented in favor of a hike — a notably hawkish split for Chair Kevin Warsh’s second meeting at the helm.
🟡 Warsh said the Fed stands ready to act if needed, but the divided vote left investors uncertain whether a September hike is back on the table.
🟡 DoubleLine’s Jeffrey Gundlach argued bond-market signals actually call for the Fed to raise rates further to hit its 2% inflation target.
🟡 No major inflation data (CPI/PPI) was released today; the next reads come via Thursday’s PCE report (see Tomorrow’s Calendar).
Treasury Bonds
🟢 The 2-Year yield slipped to 4.244% as short-end rate-cut expectations held firmer than the long end.
🔴 The 10-Year yield rose to 4.681%, up roughly 7 basis points on the day.
🔴 The 30-Year yield jumped to 5.213%, its highest level since 2007.
🟡 The curve steepened notably, with long-dated yields bearing the brunt of the hawkish-dissent reaction while the front end stayed anchored.
Geopolitics
🔴 Iran’s Revolutionary Guard fired ballistic missiles at Jordan’s Muwaffaq Salti Air Base, a key U.S. military hub; Jordan’s military said it intercepted five of them.
🔴 The U.S. partnered with Saudi Arabia to strike Iran-backed militias in Iraq in response, killing at least 20 fighters and six Iranian advisers.
🔴 Drone strikes also ignited fires on two natural gas vessels at Egypt’s Damietta port; responsibility was not immediately claimed.
🔴 The flare-up broke a fragile ceasefire that had held for several days.
🟡 Regional mediators said they were still working with both sides to restore calm.
🔴 The renewed hostilities were the direct catalyst for today’s oil spike (see Commodities).
Foreign Markets
🟢 FTSE 100 closed at 10,908.41, +0.34%
🔴 DAX closed roughly flat at 25,460.48, -0.01%
🔴 CAC 40 closed at 8,408.27, -0.60%
🔴 Euro Stoxx 50 closed at 6,248.84, -0.65%
🔴 Asian chip-supply-chain names extended their slide into Wednesday, with Samsung Electronics falling more than 5%, SK Hynix dropping nearly 10%, Kioxia plunging nearly 14%, and SoftBank down nearly 7% (see AI)
Currencies
🔴 The dollar broadly weakened after the Fed’s decision, as the divided vote raised doubt about a September hike.
🔴 EUR/USD rose to fresh weekly highs above 1.1450.
🔴 GBP/USD neared 1.3360, reversing earlier losses following the decision.
🔴 USD/JPY, which had held near 164 heading into the decision, also gave back ground as the dollar retreated broadly.
Commodities
🟢 Brent crude settled at $89.61, up 6.6%, on the renewed U.S.-Iran hostilities (see Geopolitics).
🟢 WTI crude settled at $84.31, up 6.4%.
🟢 Gold gained 0.27% to $4,048.99 as of the U.S. market close, getting an added boost from the dollar’s post-Fed retreat.
🟢 Silver tracked gold’s advance, holding a modest gain on the day.
🔴 Copper fell to $6.27 per pound, down 0.94%, pressured by the broader risk-off tone.
🟢 Exxon Mobil (XOM), Shell (SHEL), and Chevron (CVX) all rallied with crude (see Leaders).
Crypto
🔴 Bitcoin (BTC) slipped to roughly $63,538 at the U.S. equity close, down 0.53%, as traders digested the hawkish Fed dissent alongside the broader equity selloff.
🟡 Crypto showed no meaningful safe-haven bid despite the geopolitical escalation, tracking risk assets lower instead.
Prediction Markets
🟡 Heading into the decision, CME FedWatch and Polymarket contracts had priced roughly a 1-in-3 chance of a surprise hike, an unusually high probability this close to a meeting.
🟡 The Fed’s hold with three dissents leaves that repricing unresolved; prediction markets are likely to shift September hike odds higher overnight as traders digest the hawkish tone.
Volatility
🔴 The VIX closed at 20.66, up 13.45%, as the dual shock of the hawkish Fed dissent and the Iran flare-up drove demand for protection.
🟡 Still an elevated-but-not-extreme reading; a push toward the 25–30 range would signal more acute fear heading into Thursday’s GDP and PCE data.
Tomorrow’s Calendar
Q2 GDP, first estimate — 8:30 AM ET
June PCE price index and core PCE — 8:30 AM ET
June personal income and personal spending — 8:30 AM ET
Bank of England interest rate decision
Earnings before the open: Mastercard (MA), SHEL, Anheuser-Busch InBev (BUD), Bristol-Myers Squibb (BMY), Altria (MO), Southern Company (SO), Sanofi (SNY)
Earnings after the close: Apple (AAPL), Amazon (AMZN), Stryker (SYK)
3 Scenarios
🟢 Bullish: Thursday’s GDP print comes in solid without reigniting inflation fears, PCE data lands in line, and Apple/Amazon earnings extend Microsoft’s strong AI-demand read-through. Iran signals de-escalation, oil gives back some of today’s spike, and the Nasdaq 100 stages a relief bounce off correction territory.
🟡 Neutral: Markets chop as investors digest a mixed picture — Microsoft’s strength offset by Meta’s stumble, GDP and PCE roughly in line, and the Iran ceasefire talks continue without resolution. Chip names stay under pressure while non-tech sectors hold up better.
🔴 Bearish: PCE inflation runs hot, reinforcing the case the three Fed dissenters made for a hike, while Iran-U.S. hostilities escalate further and oil keeps climbing. Apple or Amazon disappoint on AI capex commentary, deepening the chip-sector rout and dragging the Nasdaq 100 further into correction.
Final Take
🔴 Wednesday captured the market’s central tension in one session: a Fed that won’t hike, three officials who think it should, and a geopolitical shock that makes the inflation case harder to dismiss.
The Iran ceasefire’s collapse and the resulting oil spike aren’t just a headline risk — they’re now doing some of the Fed’s tightening work for it, and Thursday’s PCE data will show how much.
Underneath the macro drama, the chip-stock rout that pushed the Nasdaq 100 into correction is a separate but related story: investors are questioning whether AI infrastructure spending can keep justifying itself, even as Microsoft’s Azure beat argues the demand side is still very real.
Meta’s miss and light guidance cut the other way, and that split verdict on Big Tech AI spending is likely to define Thursday’s open as much as the Fed or Iran will.
Bottom line: this market is being pulled in three directions at once — rates, oil, and AI capex skepticism — and none of the three resolved cleanly today.
Source: CNBC, Yahoo Finance, The Motley Fool, Bloomberg, Reuters, Associated Press, TheStreet, Washington Post, FXStreet, FXEmpire, Trading Economics, TradingKey.
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