Pal Yesterday Macro and Geopolitics — 6.12

1. 🔥 Trump halts Iran airstrikes, possibly signs peace agreement over the weekend — U.S. stocks hit their biggest single-day gain in two months
▶️Key points:
• Trump first threatened on Truth Social to "launch a fierce attack on Iran tonight," vowing to seize Kharg Island (Iran’s 90% oil export hub), then within hours did a 180-degree turn: announced the cancellation of the airstrike that night, and at the White House press conference said "the agreement document is close to finalization and will be signed soon"
If signed, it will ensure Iran does not develop nuclear weapons + reopen shipping through the Strait of Hormuz
• The three major indices posted their largest daily gains since April 8 (the last temporary ceasefire):
Dow +929.97 points (+1.86%) → 50,848.75 (reclaiming 50K)
S&P 500 +1.75% → 7,394.30
Nasdaq +2.54% → 25,809.66
• WTI crude oil -2.58% to 87.71; Brent -2.92% to 90.38
• Spot gold +~2% to approximately $4,159
• PHLX Semiconductor Index +7.91%, the largest single-day increase since April 2025, with all 30 component stocks rising
Derivative data: Polymarket Iran peace odds surged; U.S. Treasury yields fell back as oil prices declined
▶️Summary:
This is a typical "geopolitical fear premium release" market.
Core logical chain: Peace → reopening of the Strait of Hormuz → crude oil plummet → cooling inflation expectations → violent rebound in semiconductor/tech stocks.
2. 🔥 PPI exploded but the market selectively ignores it
· May YoY +6.5% (expected +6.2%), the largest increase in three years
· CME pricing 69% chance of at least one rate hike this year, FOMC decision next week
· But M2 money supply has not expanded, CPI unlikely to break 2022 highs — this may be the underlying logic behind the market’s willingness to ignore inflation
3. Pal’s view:
This rebound is driven by "peace premium" rather than fundamental improvement.
Agreement signed over the weekend → tech stocks continue to surge on Monday;
If not signed → 3-5% gap down.
Not recommended to be fully long before the FOMC.