Yesterday the markets showed a rare picture. Oil is falling, and yet gold and bitcoin are falling along with it. That does not usually happen. The answer sits in one word: the dollar.
Market snapshot
The S&P 500 closed at 7,358, almost flat, down 0.10 percent. The index is waiting to hear what Micron’s results say.
The Nasdaq fell 0.43 percent to 25,477, with technology weaker again.
The Dow was the only one in green, up 182 points to 51,849.
Oil keeps sliding. WTI is at $69.4 and Brent at $73. Over the month both fell about a quarter, because the Strait of Hormuz is passable again and the fear of an Iranian war is receding.
Gold dropped below $4,000 for the first time in seven months and now sits near $3,987. The reason is not calm, it is the shadow of a rate hike.
Bitcoin fell below $60,000, with a session low of $59,000, the lowest since October 2024. Since the May 25 peak it has lost almost $18,000.
The dollar is on the other side. The DXY index is at 101.15, the highest in more than a year. A strong dollar is the enemy of everything risky, and yesterday that was visible in pure form.
Lithuania and the Baltics
The prime minister. President Nausėda is putting Mindaugas Sinkevičius forward to the Seimas as head of government. The 42 year old Social Democrat leader takes the wheel after Inga Ruginienė’s cabinet, which lasted barely nine months, resigned.
The coalition. The new majority is made up of the Social Democrats, the Democrats For Lithuania and the Farmers, 75 votes in all. At least four ministers will change, with the Democrats naming the heads of agriculture, energy and health.
The session. The Seimas is extending its spring session to July 14 so it has time to confirm the new government.
Drones. A secret drone plant in Vilnius has become a target for Russian intelligence, LRT reports. The war has reached the production chain, not just the front.
Sabotage. German officials carried out searches at a former Gazprom subsidiary, with Russian-backed sabotage against a natural resources company suspected.
China. China’s envoy warned the EU over trade restrictions. The tone is hardening in both directions.
Europe
NATO. Poland’s prime minister Tusk called in Berlin for stronger transatlantic solidarity, and chancellor Merz echoed him on collective European defence. The words are familiar, the question is whether budgets follow them.
Heat. A wave above 35 degrees is covering Europe, affecting more than 94 million people. Lithuania expects 33 to 35 degrees over the weekend.
Ukraine
Moscow. Ukrainian drones struck Gazprom’s Moscow oil refinery, and black columns of smoke rose over the capital. Overnight the helium and gas processing plants in Orenburg were also attacked.
Crimea. Special operations forces hit air defence systems near the Kerch Strait and the airfields at Saky and Hvardiiske. In Sevastopol an electrical substation caught fire after a strike and the city was left without power.
The front. In Zaporizhzhia region 1,021 attacks were recorded on 38 settlements in a single day, with one person killed and twelve wounded.
The assessment. A run of political wins and deep strikes has revived hopes that the war is turning Kyiv’s way. Analysts warn that the price being imposed on Russia rises together with the risk of escalation.
Geopolitics
Iran. The war is over on paper. The Islamabad memorandum signed on June 17 ended a conflict of almost four months that began on February 28, when the United States and Israel started an air war and supreme leader Khamenei was killed. For 60 days Iran is letting ships pass through Hormuz without a fee, and Washington has lifted the naval blockade.
Hormuz. Energy Secretary Chris Wright declared that the United States has permanently ended Iran’s ability to close the strait. Tanker traffic is rising and oil is falling.
The money. At the same time Trump is asking Congress for nearly $88 billion, most of it for the Pentagon, to cover the bills for the Iran war. The war is finished, but the invoice is only now arriving.
Talks. The United States and Iran sit down for technical negotiations in Switzerland at the end of June. Trump meanwhile scolded NATO allies for what he called weak support on the Iran question.
Venezuela. Two powerful earthquakes took at least 32 lives and injured more than 700 people.
Central banks
The Fed. At the June 17 meeting rates were left in the 3.50 to 3.75 percent range. The new chair Kevin Warsh, who replaced Powell on May 15, committed himself to price stability.
The turn. What matters is not the decision but the projections. The Fed’s median now shows one or two hikes this year, though at the start of the year the market expected cuts. April inflation jumped to 3.8 percent, the highest since May 2023, as the oil shock drove prices up. That is why gold and bitcoin are falling together with oil, money is getting more expensive.
IPO radar
Anthropic. Raised $65 billion in a Series H round at a valuation of $965 billion, passing OpenAI on May 28. A draft S-1 was filed on June 1, with annualised revenue past $47 billion.
OpenAI. Filed confidentially for an S-1 on June 9 at a valuation of about $920 billion. The company itself says some time may still pass before an actual listing.
SpaceX. Musk’s company, now merged with xAI, has filed its IPO application and is aiming at a $1.75 trillion valuation.
Analyst voices
Lyn Alden. In the June newsletter, The Wild West, she writes that most investment frameworks were built in an era of expansion, trust and a US-led order. That era has ended, and old maps do not fit new terrain. Source
Luke Gromen. He repeats the fiscal dominance dilemma: the dollar or the bond market. Defend the dollar and let yields rise, and the interest bill bankrupts you. Defend the bonds and print money, and you devalue the currency deliberately. Source
What to watch tomorrow
The Seimas vote on Sinkevičius, and whether the new majority holds at 75 votes.
Micron’s results as a thermometer for the semiconductor sector after yesterday’s Nasdaq weakness.
DXY above 101, and whether the dollar keeps squeezing risk assets.
Oil below $70, and whether the opening of Hormuz keeps pressing the price down.
The US and Iran talks in Switzerland, and whether a technical tone holds the truce.
Meška’s comment
The interesting thing about yesterday is not which asset fell, but that they fell together. Oil down, because the war is over. Gold and bitcoin down, because a finished war means less fear and a stronger dollar, and a strong dollar with the threat of a rate hike takes everything that has no yield. Calm in the markets? No, this is a reshuffle, where cash briefly becomes king.
But Gromen’s dilemma lies under the table. The United States has just promised $88 billion for a war that is already finished, and that is only one line on a growing invoice. The hegemon defends the dollar by raising rates, and those same rates raise the burden of the debt. This wheel does not turn forever. Yesterday was the dollar’s day, but not the dollar’s decade.