Market Minute ⏱️ 7/1/26: Warsh Worries Pressure Markets

Mike Larson | Editor-in-Chief

Stocks are under pressure as the third quarter gets underway. Gold, silver, and crude oil are also slipping, while the dollar is up modestly. Treasuries are flatlining.

Kevin Warsh, Federal Reserve...HAWK? The new Fed Chair is making his first public appearance on the global stage today – and markets are watching closely to see if he tips his hand about potential interest rate hikes. The Fed’s next two meetings conclude on July 29 and September 16.

Expectations for at least one 2026 hike helped boost the US dollar in the second quarter, pressuring contra-dollar assets like gold. Right now, the chance of a rate increase at the July meeting is still low “officially” (36% or so). But futures and options markets are skewed toward positions that would pay off in the event of an increase.

NKE, MSFT (YTD % Change)

We’re in a lull until the Q2 earnings season ramps up. But a few companies are still sharing results with investors – including the athletic shoe and apparel maker Nike Inc. (NKE). It reported fiscal fourth quarter profit of $1.07 billion, or 72 cents a share, though that included a 52-cent gain from expected tariff rebates. Sales dipped 1% and Nike warned of ongoing weakness in China, discouraging investors. Nike stock is down 34.5% year-to-date.

Lastly, could Microsoft Corp. (MSFT) be planning layoffs? Business Insider reported that the software and AI giant may cut 2.5% of its workforce as soon as next week – with the reductions falling in sales, consulting, and the Xbox gaming unit. As of mid-2025, the company had about 228,000 full-time workers. Microsoft stock is down 22.5% YTD.

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• HAL: Focus on Energy Security Should Boost this Services Name
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  The recent conflict in Iran is having important effects worldwide. But in this energy cycle, the rise in spending by producers isn’t solely motivated by higher commodity prices. That should be bullish for services names like Halliburton Co. (HAL), suggests Elliott Gue, editor of Energy and Income Advisor.

• MKGSF: Transformative Acquisition Makes this Explorer a Buy
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