Equities are up slightly on the last trading day of Q2.

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Core PCE YoY came in at 2.7%, slightly hotter than expected and still too far away from the Fed’s 2% goal to justify any talk of a rate cut. At the same time, personal income came in at -0.4% versus +0.4% expected.

Futures slightly backed off their overnight ramp, but still point to new all-time highs for SPX.

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ES continues melting up toward its previous all-time highs. Granted, it’s happening mostly on the back of VIX in after-hours, but it’s happening all the same.

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The one constant about VIX is the series of lower lows and lower highs since 2022, forming the purple channel below. The channel was obviously broken out of several times, mostly notably by the brief August 2024 and April 2025 spikes to 65.73 and 60.13 which served as the top of a sharply rising white channel dating back to July 2024.

VIX sits today at the intersection of the two channels, meaning the next move will be very important.

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This post’s title is a bit of a red herring. There is really no Fed decision to be made – at least as it regards a rate cut.  Inflation remains too high, particularly with the chaos and uncertainty of tariffs, a hot war in the Middle East (which the US might join) causing oil/gas prices to break out, and an administration looking for every opportunity to goose the economy.

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Consumers pulled back 0.9%, even more than expected in May. This follows a 0.1% loss in April and could factor into the Fed’s comments on the economy which will be released tomorrow.

Futures, already lower on a rebound in oil prices, fell even more.

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Futures are up sharply following an after-hours reset in oil prices and VIX.

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Following days of speculation, Israel attacked Iran, killing three of Iran’s most powerful leaders and bombing multiple nuclear, missile and military targets. Oil prices shot up over 10%, bolstering inflationary fears and neutralizing Trump’s argument for a Fed rate cut. The last time CL broke out of its triangle, stocks fell nearly 5%.Futures initially fell nearly 2% overnight, but have since rebounded to a 1% loss. Though the State Department initially disavowed any knowledge of or assistance in the planning of the attack, Trump’s latest comments have called that into question – increasing the odds that the US will be drawn into a kinetic conflict.

“Iran should have listened to me when I said — you know, I gave them, I don’t know if you know but I gave them a 60-day warning and today is day 61,” he told CNN. “They should now come to the table to make a deal before it’s too late.”

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PPI rose only 0.1% MoM in May, but the annual rate was still elevated at 2.6% (2.7% less food, energy and trade services.) It leaves the FOMC in a place where they can delay any rate cuts in order to see how tariffs affect prices.

Futures have made up some of their losses following yesterday’s .886 tag.

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Between delays in imposing the worst of the tariffs and massive help from the energy sector, inflation came in at 0.1% MoM (slightly below expectations) and 2.4% YoY (slightly above expectations.) Core inflation, which excludes food and energy price effects, rose 2.8% YoY.

The news was just good enough to get ES up to our .886 Fib target where it retreated despite a predictably well-timed tweet from Trump that trade negotiations with China have been successfully completed.The deal is reportedly subject to final approval from Trump and Xi, which means that Xi now has maximum leverage since Trump is desperate for a “win” which will drive stocks to new highs.continued for members… (more…)