Three months ago, oil was above USD 112. The Strait of Hormuz was near-shutdown. Global inflation was accelerating. The Fed was being asked to respond to a war-driven energy shock with a brand-new chairman at the helm.
In the June 2026 Monthly Market Update, Li Chye, Financial Analyst and Coach at Beyond Insights, walked through how all of that is shifting – and what it means for investors navigating the second half of 2026.
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⚡ **Why This Is Worth Reading Now: Updated 23 June 2026** This session was recorded on 23 June, the same day US-Iran talks in Switzerland concluded with both sides agreeing on a 60-day roadmap to a final deal and a communication line to manage the Strait of Hormuz. Since then, Brent crude has continued to soften, now trading around USD 77 to 78 per barrel, a dramatic reversal from the USD 112 Li Chye was tracking just five weeks ago. Everything covered in this session is unfolding in real time. Read on with that context in mind.
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The most significant market development of the month is the US-Iran memorandum of understanding, signed on 17 June at Versailles. The key terms: a 60-day ceasefire extension, the reopening of the Strait of Hormuz to commercial shipping, the US lifting its naval blockade of Iranian ports, the start of nuclear negotiations, and discussions on sanctions relief and frozen Iranian assets.
On the day the MOU was announced, 15 June, oil fell 4.76% to USD 83.17 per barrel and the Dow closed at a record high of 51,671 points. The S&P 500 rose 1.65% and the Nasdaq surged 3.07%.
Since then, oil has continued to fall. As of 25 June, Brent is trading around USD 77 to 78 per barrel. Shipping traffic through the Strait is recovering, with Iran having shipped more than 30 million barrels through the waterway in the past week. Gulf producers including Kuwait and Abu Dhabi's ADNOC have resumed or are preparing to raise output.
But Li Chye flagged a key risk in the session: Trump has warned he could restart strikes if the final deal terms collapse. With 60 days to negotiate unresolved issues, including Iran's nuclear programme and uranium enrichment, the situation remains dynamic. Monitor it.
Industries directly benefiting from the ceasefire: airlines, cruise liners, and broader travel. Rate-sensitive stocks are also responding positively as lower oil eases near-term inflation pressure.
Kevin Walsh's first FOMC meeting produced no change in interest rates, which remain at 3.5 to 3.75%. But the dot plot – the Fed's forward-looking projection of where rates are heading – has flipped hawkish. The median projection has shifted from 3.4% to 3.8%, signalling a potential one rate increase before year end.
Why is the Fed turning hawkish? CPI came in at 4.2%, the highest in two years. PPI, the leading indicator for future inflation, is running at 6.5%, well above the Fed's 2% target.
Walsh also launched five internal task forces to study and potentially overhaul how the Fed operates, covering communications, the balance sheet, data, jobs, and inflation. The market's initial reaction was cautiously positive: the view is that Walsh may be exploring alternatives to blunt rate hikes rather than simply defaulting to the aggressive approach some feared.
Li Chye's read: do not assume an aggressive rate hike cycle is guaranteed. Wait for the task force outcomes and watch upcoming FOMC communications closely. Walsh's year-end review will be a pivotal moment.
In the meantime, Fed funds futures continue to price in zero rate cuts in 2026, with the probability of a rate increase later this year rising.
SpaceX went public this month. Elon Musk became the world's first trillionaire, with SpaceX now the seventh largest US company by market capitalisation. OpenAI, Anthropic, Databricks are all expected to follow. In Hong Kong, Xiaohongshu (RedNote) is also in the pipeline.
Here is the market implication Li Chye flagged: when mega-cap names go public, index funds need to rebalance. They buy the new additions and trim existing holdings. This can create short-term selling pressure on large-cap Nasdaq names, even fundamentally strong ones.
This is not a reason to exit. It is a reason to understand the source of volatility when you see it. A short-term dip driven by index rebalancing is structurally different from a dip driven by deteriorating fundamentals.
Also in focus at the session: rotation from Mag 7 stocks (Amazon, Meta, Microsoft, Google) into other sectors. These four hyperscalers continue to raise capital aggressively – through share sales, bonds, and new equity issuance – to fund AI infrastructure spending. Investors are asking whether this level of capital expenditure can be monetised. That question is creating a rotation, not an exit from markets.
Goldman Sachs projects AI capital expenditure could reach USD 1 trillion by 2027. The hyperscalers (Google, Microsoft, Amazon, Meta) are collectively spending close to USD 600 to 800 billion today, with plans to increase.
But the more significant development is the emergence of agentic AI. This is the shift from AI that trains and infers in data centres to AI that executes tasks autonomously on devices: smartphones, laptops, desktops. Booking travel. Automating workflows. Running processes without human input.
The implication for investors: agentic AI increases demand for CPU, memory, and high-speed networking at the device level – not just in data centres. This is creating new tailwinds for AMD, Intel, ARM, and Qualcomm, which Li Chye noted have been reacting positively to this trend.
On the established AI names: Nvidia and Broadcom remain strong, but their momentum has moderated somewhat as hyperscalers develop custom AI chips to reduce dependency on third-party providers. Anthropic reported an 80-fold increase in annualised revenue and usage in Q1, validating that compute demand remains structurally high.
Li Chye's word of caution on the hyperscalers: be cautious on Amazon, Meta, Microsoft, and Google. The capex is heavy. The monetisation question is real. Monitor quarterly earnings carefully.
Beyond AI, Li Chye mapped several other areas worth watching:
Data centre and reshoring infrastructure. US data centre construction creates demand for power infrastructure, turbines, generators, battery cells, solar panels, and fuel cells. US reshoring policy under Trump continues to drive industrial construction demand. Both are multi-year cycles.
Critical minerals. Copper, silver, steel, lithium, and uranium remain in multi-year structural shortage cycles. Reshoring, data centre construction, EV growth, and the robotics trend all compete for these materials. With oil now lower, the inflation and dollar dynamics that were pressuring commodities in May have shifted somewhat.
Cyber security. Agentic AI is expanding the attack surface. AI-powered hacking is a real and growing threat. Demand for AI-enabled cyber security is rising in response.
Malaysia. Data centre investment in Johor remains strong. Malaysia holds a Grade A data centre rating and continues to attract multinational investment as a Southeast Asian hub. The upcoming state election introduces some near-term uncertainty for foreign fund flows, which Li Chye flagged as a sentiment variable to watch.
Future cycles to watch. Terafab, Elon Musk's ambition for a Tesla and SpaceX-owned self-sufficient chip manufacturing facility at a scale larger than TSMC. Humanoid robots moving toward practical mass deployment over the next two to three years. These are not near-term trading calls but long-cycle positioning themes.
USD 7.9 trillion in cash remains in money market funds. With US interest rates at 3.75%, the risk-free return remains attractive enough that capital rotation back into equities is not automatic. Upcoming inflation data (CPI and PPI) and the Fed's next meeting will be the primary catalysts for any shift in this cash position.
Li Chye's framework remains the same: the market moves 40% on macro, 30% on industry, and 30% on company fundamentals. The macro picture has shifted meaningfully since the start of the year. Oil is down sharply. The ceasefire is in place. But a new risk has emerged: a hawkish Fed with an uncertain reform agenda, sticky inflation, and an IPO wave that creates near-term rotation pressure.
The AI industry cycle remains intact. The opportunities are real. But the discipline needed to navigate the second half of 2026 is the same as it has always been: study the companies, manage the risk, and be prepared before the opportunity arrives.
The 60-day negotiation window between the US and Iran closes in mid-August. That window will be one of the most important variables shaping global markets in the second half of the year.
The frameworks Li Chye uses in these sessions – reading Fed policy shifts, identifying structural industry cycles, managing risk across volatile macro conditions – are what we teach at Beyond Insights.
Our free 3-hour webinar walks through a systematic approach to global investing and trading, built around the S.V.S. framework: Systematic, Versatile, and Safe.
If you are navigating this market and want a clearer way to think about it, register for the next free webinar below.
All content in this article is based on publicly available data and is intended for educational purposes only. It does not constitute financial advice or a recommendation to buy or sell any security.
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