Big news late at night! The Federal Reserve’s stress test might become a pretext for “Wosh won’t rescue the market,” and the chip plunge is only the beginning. Is your $BTC still safe?

Tonight, the market welcomes a night of silent pricing. Four major events—Nvidia, Micron, the Federal Reserve stress tests, and others—simultaneously unfold, focusing the final judgment on market illusions. If banks pass their health checks smoothly, it will instead bolster the new Chair Powell’s confidence to refuse market bailouts. Amidst the chip crash, the market must learn to reprice itself in the dark night without the "Fed put" safety net.

First, the market background: On the afternoon of June 23, Korea’s KOSPI plummeted 10%, triggering a circuit breaker. That evening, the US chip index dropped 7.9%. On June 24, KOSPI rebounded 4%, but the story didn’t end—starting early morning Beijing time on June 25, four events unfolded in quick succession within a narrow time window.

At midnight, Nvidia’s shareholder meeting. At 2 a.m., Fed Governor Cook speaks—she will deliver the opening remarks at the Cleveland Fed Small Business Symposium. After the US stock market closed, Micron released its most-watched earnings report of the year, with the stock soaring over 300% this year. At 4 a.m., the Fed announced the stress test results for 32 large banks—an extreme assessment under scenarios like unemployment soaring to 10%, commercial real estate and corporate bonds collapsing.

These events are unrelated. Nvidia discusses capacity ramp-up for Blackwell and Vera architectures; Micron talks about HBM demand prospects; Cook discusses small businesses; the stress test assesses how much loss banks can withstand during a recession. But they are linked—by a term that has quietly emerged over the past two weeks: Powell’s bearish options.

This term refers to: the market’s hope that Fed Chair Powell, like his mentor Greenspan, will step in to backstop during a market crash. After Black Monday in 1987, Greenspan cut rates; after Lehman in 2008, Bernanke launched QE; in March 2020, Powell cut rates twice in two weeks. Each crisis deepened this belief. The market has become accustomed—when the fall is severe enough, someone will intervene.

This time, the market asks: Will Powell? Tonight’s four events, examined together, will serve as a concentrated stress test on this illusion.

"Powell’s bearish options": what is the market betting on? The "Fed Put"—a Wall Street concept circulating for decades—is that whenever markets fall sharply, the Fed intervenes with rate cuts and QE to support. Greenspan, Bernanke, Powell—each crisis deepened this faith. Since Powell took office, the market instinctively projects this belief onto him. Since May 25, a hot topic has appeared in Chinese and English financial media: "Will Powell’s bearish options appear?"—Will Powell’s Fed step in when the AI bubble bursts or when US stocks plunge like Korea’s recent crash?

But comparing Powell to Greenspan is itself a major misreading.

The June FOMC already provided an answer. A week ago, on June 17, Powell chaired his first FOMC meeting. What did he do?

First, Powell likely did not submit his own interest rate projections. Economists at Goldman Sachs and Bank of America believe that, given Powell’s long-standing criticism of forward guidance—he explicitly stated at a Senate confirmation hearing, "Unlike many Fed colleagues, I don’t believe in forward guidance tied to economic data"—he probably did not participate in the dot plot for his first time.

Second, the committee took the most hawkish action it could without Powell: the median dot plot removed the only remaining rate cut in 2026. Three months ago, the dot plot implied a 25 basis point cut; now, it’s zero.

Third, at least three voting FOMC members forecast rate hikes in 2026. With inflation (CPI at 4.2%, PPI at 6.5%) already making rate cuts mathematically impossible.

Fourth, the statement wording. JPMorgan economists suggest the FOMC should replace the current "dovish tilt" language with neutral wording—or simply omit forward guidance altogether.

These actions indicate not that "Powell will hold back for now," but that Powell is systematically dismantling the "Fed signal safety net" that has sustained markets for the past twenty years. He is rebuilding market discipline—first teaching the market to price without the Fed Put.

Stress test: clean results, contradictory implications. Tonight’s stress test results are almost certain to be "pass." Last year’s tests showed all large banks performed well, with the six biggest banks’ stock prices rising over 25%. This year, the Fed continued its policy of freezing capital buffers until 2027—meaning even if a bank performs poorly, its capital requirements won’t increase. The capital buffers of Bank of America, JPMorgan, and Wells Fargo last year fell to the minimum of 2.5%, leaving no room for dividend payouts or buybacks, regardless of tonight’s results.

On June 23, the day of the chip stocks crash, a detail was overlooked by many analyses: the regional bank ETF (KRE) rose against the trend that day. There was indeed capital withdrawal from AI/semiconductor sectors, but not in cash—rather, into banks. The banking system itself isn’t the problem. Tonight’s stress test is likely just to confirm this.

But here’s the key question: if all 32 banks pass, with ample capital even under extreme scenarios—this provides Powell with the strongest reason not to intervene. The logic of the "Fed put" has always been: market problems → potential contagion to banks → Fed must rescue. But if the stress test shows the banking system remains resilient even in AI crashes and 10% unemployment, then the logic chain of "contagion" breaks. Asset price declines remain a matter of asset prices—they are not the Fed’s problem.

Greenspan’s ambiguity vs Powell’s ambiguity: same tool, opposite purpose. Powell is often compared to Greenspan—he has publicly cited Greenspan as a mentor. Both share a style: Greenspan was known for "if you think you understand what I’m saying, I probably haven’t explained clearly," and Powell similarly advocates that central banks should "learn to operate without applause or an audience sitting on the edge of their seats."

But the same tool points in opposite directions. Greenspan’s ambiguity was to leave room for market flexibility—ready to act if needed, but without pre-commitment. Essentially, "I won’t tell you if I will rescue, but I might." Powell’s ambiguity aims to eliminate illusions—he doesn’t submit dot plots, suggests reducing FOMC meetings from eight to four per year, hints that press conferences may no longer follow every meeting. Essentially, "I won’t tell you my judgment in advance, and you shouldn’t assume I will rescue."

The difference: Greenspan’s ambiguity carried an implicit safety net commitment. Powell’s does not.

A set of numbers worth viewing together: 34 former Fed officials and staff were surveyed before the June FOMC; 32 provided forecasts—17 thought a rate hike in 2026 might be appropriate, 14 thought not. This is a divided camp. Powell’s first task tonight is to manage this split—not to cater to market sentiment.

The combined effect of tonight’s four events. Returning to tonight, these four events landing within the same narrow window compress the market into a very tight information corridor:

If Micron’s earnings beat expectations + Nvidia’s shareholder meeting signals are hawkish → chip stocks may continue the rebound from June 24 in Korea, temporarily masking the "Powell’s bearish options" issue.

If Micron’s results are below expectations or guidance is weak → chip stocks may face pressure again after Korea’s rebound, and the "clean" results of the stress test will serve as a footnote to the Fed’s inaction.

At 2 a.m. Beijing time, Fed Governor Cook will deliver a video speech at the Cleveland Fed Small Business Symposium. Her topic is small business credit, not financial stability. But in the current market environment—after a round of AI-driven turbulence—any mention of "credit tightening" or "financing conditions tightening" by a Fed official will be interpreted as a market signal. (Last December, Cook’s speech briefly caused a hawkish shift when she mentioned "caution over asset valuations.")

But what may define tonight isn’t the events themselves—rather, the gap between their outcomes.

If the stress test is clean, Micron’s results are strong, and Nvidia’s tone is optimistic—this indicates AI infrastructure is sound, and the market needs to rebuild confidence in leverage structures, not in AI trading itself. The rollercoaster of June 23-24 was a bubble squeeze, not a bubble burst.

If the stress test is clean, but Micron’s results are weak and Nvidia’s tone is cautious—this creates a more delicate situation: evidence of cracks in AI fundamentals, but the banking system remains resilient. This means the market faces dual pressures: "asset prices need adjustment" and "no Fed rescue needed."

Three follow-up points:

First, Nvidia’s shareholder meeting guidance on Vera Rubin (the next-gen AI system with HBM4). This is the most direct variable behind SK Hynix’s slowdown in HBM4 expansion. If Nvidia confirms production adjustments, it’s not just SK Hynix’s unilateral choice but a recalibration across the supply chain.

Second, Micron’s wording on HBM demand prospects. As the world’s third-largest HBM supplier, Micron’s quarterly call isn’t just about current numbers but a primary source on whether "AI storage demand is growing or peaking." The speculation about SK Hynix’s slowdown needs Micron’s words to verify or falsify.

Third, and most long-term: when will the market start discussing the next FOMC meeting (expected late July)? If the June dot plot’s removal of rate cut expectations was just the first step, and the July statement begins discussing rate hikes—then all illusions of "Powell’s bearish options" will be shattered. Not because Powell did anything, but because market expectations have been invalidated by reality.

In the April Senate hearing, Powell said: "The central bank should learn to operate without applause." Tonight’s four events together will mark the first night for the market to relearn pricing without applause.

For retail holders of $BTC and $ETH, the core logic tonight is "the end of liquidity illusions." The path dependence of Fed bailouts after every crash in recent years is being cut off by Powell himself. If bank stress tests are clean and cracks appear in the AI chain, funds will flee risk assets, with crypto markets leading the exit. Don’t expect a "savior" tonight. Focus on every word in Cook’s 2 a.m. speech and any correction about HBM in Micron’s call—those $BTC are the real signals that will determine the next few weeks’ direction.