Good afternoon and welcome to Markets Desk, your midday read on what's moving and why.
Alphabet is under real pressure today, off roughly fifteen percent from its all-time high, with investors rattled by the scale of AI capital spending and the departure of two senior AI executives. But the bull case remains intact — Google Cloud is growing hard, the stock trades at a forward price-to-earnings of just twenty-four, and Dow Jones inclusion arrives June twenty-ninth, which tends to bring structural buying from index funds.
Shifting to the rate picture, former Fed colleagues of incoming Chair Kevin Warsh are sending a clear message to markets: plan for higher rates. Warsh has a well-documented hawkish history — he resigned in two thousand eleven over quantitative easing — and while he's shown some openness to AI-driven productivity arguments for lower rates, insiders say his instincts run tight. That's a meaningful signal for bond traders positioning through year-end.
And adding a sharp geopolitical edge to the session, Iran has claimed strikes on U.S. military facilities in Kuwait and Bahrain following American attacks near the Strait of Hormuz. Trump has responded with direct threats of annihilation. The Strait handles roughly a fifth of global oil supply, so any escalation there carries immediate consequences for energy prices and risk appetite broadly.
That's the tape. Markets Desk, signing off the floor.
