A deal with Iran on the Strait of Hormuz—with a truckload of caveats—could come as soon as today
Fortune · C · trust 53/100
➡️ Did someone forward you this email? If you would like to receive this information directly, every morning before the markets open in New York, sign up here .
They bought the rumor and sold the news: SpaceX shares rose 9.43% yesterday before the closing bell and then, overnight, declined 10.8% after Elon Musk delivered the company’s Q2 results in its first-ever post IPO earnings call. Traders were spooked by the company’s $18.4 billion in capex, way more than the $13.2 billion analysts had expected.
Revenue nearly doubled year-over-year to $7.8 billion, above expectations of $6.9 billion. The net loss declined by nearly half to $541 million, Fortune’s Amanda Gerut reports .
As is his custom, Musk offered a rose-colored outlook for the rocket-and-connectivity AI giant, proclaiming that SpaceX’s internal target for hitting $1 trillion in annual revenue had moved forward a full year since the IPO from 2031 to 2030, with a “non-zero chance” it hits the mark in 2029.
In the not-so-distant future, Musk said, his robots will be manufacturing on the moon. From there, moon-based robots will enable SpaceX to build a mass accelerator with solar production. Musk admitted it all sounded “totally nuts” and “it sounds super sci-fi right now, but it’s going to happen.”
“It’s really a ridiculously profound difference,” he said. “But that is our plan, and I think we will achieve that plan.”
From Pochettino to MLS, the giants of American finance keep making big promises about the future of U.S. soccer - Catherina Gioino
Europe’s AI sovereignty is under threat. Could Mistral be the answer? - Bea Nolan
Billionaires have been flooding the midterms with cash, but one of the GOP’s most reliable megadonors just went silent - Sydney Lake
Trump’s tariffs were supposed to boost American manufacturing, but the new levies are actually pushing some companies back to China - Sasha Rogelberg
Gen Z’s anti-capitalist brand says one thing. Its spending data says something more interesting - Nick Lichtenberg
President Trump could announce a deal to reopen the Strait of Hormuz as soon as today, according to Axios . Sources told the site that Iran and Oman have sketched an agreement in which Iran controls the northern route for inbound traffic while Oman controls the southern route for outgoing vessels. The agreement would include a 60-day ceasefire and no tolls on traffic.
The news, while hopeful, comes with a truckload of caveats:
Context: We have been on this carousel before. Both Iran and Trump can scuttle the deal with a single round of bombing. And the Houthis, Iran’s Yemeni proxy terror group, attacked another Saudi ship in the Bab al-Mandeb this morning, their eighth strike on Saudi ships so far. There is no indication yet that any deal will include opening the Red Sea route.
“This would probably mean tolls eventually (probably branded a ‘tariff’ or an ‘environmental charge’ according to political bias). A toll would be economically negligible. Iran cementing control of the Strait has implications for insurance, supply chain security, and Gulf infrastructure investment,” Paul Donovan at UBS commented this morning.
Palantir rose an astonishing 29.45% yesterday after it delivered Q2 earnings that vastly exceeded expectations. The stock gave back 2.85% in overnight trading. This chart, covering the last five days, says it all:
The S&P 500 has been doing well recently and one reason for that is analysts’ estimates of future earnings keep being revised upwards, as this chart from Goldman Sachs’ Peter Oppenheimer shows. This is unusual, he said in a note, because analysts usually revise their estimates downward as the year rolls on.
Fact of the day: “While the S&P 500 was down slightly in July (-0.1% total return), the equal-weighted S&P 500 gained 1.0% and breadth improved: 61% of stocks beat the S&P 500, up from 46% in 1H26 and 30% in full-year 2025,” Bank of America’s Savita Subramanian said in an email.
Analysts have been grumbling for a while about Fed Chairman Kevin Warsh ending the “forward guidance” the central bank used to give about where monetary policy is heading. But on Monday one of the bigger beasts of Wall Street, Goldman Sachs Chief Economist Jan Hatzius, came out guns blazing at Warsh. There is a “fundamental problem with this approach,” he argued in a note , because giving markets less information about what the Fed is doing will make them more “error-prone.”
It could, he said, lead to a “hall of mirrors” in which traders make a wrong guess that the Fed is about to hike rates and the Fed then accidentally takes it seriously. “Fed officials might take the resulting interest rate move as conveying new information about the economy and hike, market participants might take this as foreshadowing further hikes down the road, and so on,” he told clients.
“The problem with this approach is that participants in short-term interest rate markets—where Fed communication matters most—price what they think the Fed will do, not what it should do. This remains true if the FOMC provides less information about its reaction function, except that markets will then be more error-prone,” he wrote. In the absence of reliable information, “It could … lengthen the lags of monetary policy and introduce unnecessary volatility into financial conditions and the real economy.”
This chart plots the National Federation of Independent Business survey on hiring intentions against the government’s private payroll numbers, and, as you can see, the NFIB line roughly predicts the direction of the job numbers four months in advance, according to Pantheon Macroeconomics’ Samuel Tombs. He thus forecasts that the government will report 75,000 new jobs on Friday.
That will not be strong enough to tempt Fed chair Kevin Warsh into hiking interest rates in September, Tombs and his colleague Oliver Allen say. That’s a counterintuitive take because right now a 62% majority of bets in the CME FedWatch futures market are saying…
Read the original at Fortune →
Open in TruthVane →