The last paragraph in the rundown below does a good job describing the action among our core positions this morning.
The bottom line in terms of today's global selloff, also covered below, is the lack of any official message out of this week's US/China talks suggesting China is stepping in to assist in resolving the Iran situation... That'll no doubt at some point change if the Strait of Hormuz is not opened sooner than later.
We'll have a thorough macro update for you over the weekend.
In the meantime, here's this morning's rundown*:
PWA Morning Note
Global markets are selling off this morning following two days of record highs. The causes are straightforward, and none of them are surprises to us.
No breakthrough from Beijing
President Trump departed China yesterday after two days of meetings with President Xi Jinping. The talks produced no major agreements — and more importantly for markets, no meaningful progress on Iran or the Strait of Hormuz. Markets had quietly priced in some degree of optimism heading into the summit. That optimism is being unwound this morning. WTI crude is back above $103 per barrel and on pace for a 10% weekly gain. The IEA warned this week that global oil markets could remain materially undersupplied through October even if the conflict ends next month — a reminder that a ceasefire and a reopened strait are still two very different things.
Rates at a one-year high
The 10-year Treasury yield has spiked to roughly 4.55–4.58% this morning, its highest level in a year. This follows a week in which both CPI and PPI came in well above expectations, confirming that the energy shock is no longer contained — it's broadening into services and core inflation. Markets have now fully priced out any Fed rate cut in 2026, and rate hike odds for later this year have risen meaningfully. The bond market is doing what it does in a stagflationary energy shock: it's pricing in more pain ahead.
A new Fed chair inherits a difficult hand
Today is Jerome Powell's last day as Federal Reserve Chair. Kevin Warsh, confirmed by the Senate on Wednesday in a 54–45 vote, officially takes over today. His first policy meeting is June 16–17. Warsh arrives with the White House expecting rate cuts and an economy delivering the opposite conditions — inflation at a three-year high, oil still elevated, and growth showing signs of strain. How he navigates that tension will be one of the more important variables of the second half of the year.
Tech pulls back after an unsustainable run
The areas hit hardest today are technology and semiconductors — Nvidia, Intel, AMD, and Micron are all down meaningfully. This isn't a surprise. After a historic run, the semiconductor index was trading more than 30% above its 50-day moving average, one of the widest premiums on record. Profit-taking was inevitable on any credible excuse. We trimmed our technology exposure earlier this week in anticipation of exactly this dynamic, rotating proceeds into financials, healthcare, and communications.
What this means for our core allocation
Not everything is holding up equally today, and we want to be straightforward about where the pressure is. Clean energy infrastructure, materials, and international commodity producers are all seeing meaningful declines — a reflection of the dollar strengthening on risk-off flows and broader growth concerns weighing on cyclical and commodity-linked themes. Precious metals are also pulling back despite the conflict backdrop, which is a dollar-driven move rather than a change in the underlying thesis. On the other side, our energy producers, pipeline infrastructure, and telecom holdings are all green on the day, which is exactly the offset this portfolio was designed to provide. We are not making changes. The selloff is orderly, the drivers are known, and the areas feeling pain today are ones we hold for multi-year structural reasons that haven't changed. We will continue to monitor the Iran situation closely.
This note is for informational purposes and is not a solicitation to buy or sell any security. Past performance is not indicative of future results. Please contact your advisor with any questions.
*Prepared by Marty Mazorra, Chief Investment Officer, Private Wealth Advisors. Research synthesis and drafting assisted by AI tools under advisor review. All market views, analysis, and recommendations are those of the advisor.
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