The Fed held rates at 3.50-3.75% on a 9-3 vote — the first triple hawkish dissent since 2016 — while Chair Warsh declined to commit to a fight against inflation that has sat above target for five years.² The 30-year Treasury yield spiked to its highest level since 2007, the Nasdaq 100 entered correction territory, and the Dow logged its worst session since April 2025.^1,2 Markets read this as "opaque," but the mechanism is simpler: Warsh is refusing to pre-commit precisely as oil, war, and a wage-price spiral converge, leaving the bond market — not the Fed — setting policy in real time.²

Beneath the Fed story, the AI trade split violently: Microsoft rose roughly 8-9% after-hours on 43% Azure growth and an unchanged capex outlook, while Meta fell as much as 11% after guiding Q3 revenue below consensus and confirming free cash flow near $784 million for the quarter against $30.1 billion in property purchases.^1,3 This is not an AI-bubble-bursts story — it is a capital-allocation story: Microsoft is monetizing infrastructure Meta is still building, and the difference is now visible in cash, not narrative.¹ Samsung confirmed the memory chip crunch will last through 2028 even as its profit soared, while SK Hynix crashed nearly 10% on the same "good" numbers — Korea's market has now shed 44% in 40 days, wiping out roughly $2 trillion in value, an internal tension between AI-demand euphoria and AI-capex-financing exhaustion that neither side of the trade has resolved.⁷

Overnight, the US launched fresh airstrikes on Iran after Trump vowed to "beat" Tehran following its missile attack on US forces in Jordan, and an unclaimed drone strike hit a US-owned tanker at an Egyptian Mediterranean port — the war's first extension onto Egyptian soil.^1,2 Iran has vowed to "punish the aggressor," and CENTCOM's Adm. Brad Cooper has reportedly prepared a two-week escalation option even as lawmakers on both sides warn US precision-munitions stocks are drained.² No named Pentagon or CENTCOM official has stepped forward to deny the shortage; instead, the $58.6 billion Lockheed Patriot contract — converting a $4.7 billion one-year deal into a seven-year plan to triple production — is the closest thing to an admission the government has offered.¹ Whoever controls munitions production timelines, not whoever wins the next skirmish, controls how long this war runs — and Lockheed's shareholders are the structural beneficiary of every night it continues.