WS #10051

The dominant signal in this window is the hawkish shift from the Federal Reserve under new Chairman Kevin Warsh. The Fed held rates steady but the dot plot revealed nine officials see at least one quarter-point hike this year, with six anticipating at least two. This hawkish tilt surprised markets, causing the Dow to end 500 points lower, the dollar to rally, and short-term Treasuries to sell off (SHY -0.28%, worst day since Oct 2024). Jeffrey Gundlach noted Warsh is not the 'easy money' chairman many hoped for, and JPMorgan's Bob Michele expressed surprise at the hawkish FOMC tone. This development counters the prevailing expectation of rate cuts and is bearish for growth stocks and high-multiple tech, while bullish for the dollar and financials. Separately, the US-Iran MOU details continue to circulate, with the US official reading a 14-point plan that includes ceasefire, lifting naval blockade, and reopening the Strait of Hormuz. Iraq's Rumaila oil field output increased by 300,000 bpd to 650,000 bpd, and West Qurna 2 restarted at 150,000 bpd, adding supply pressure. Smith & Wesson Brands reported a strong Q4 beat (EPS $0.36 vs $0.23 est, revenue $178.4M vs $155.3M), which is positive for SWBI. Robinhood is cutting 10% of staff (~290 jobs) despite record trading volumes, a mixed signal. SpaceX appointed Sequoia's Roelof Botha to its board and audit committee, and SPCX saw heavy options activity. Apple plans a second iPhone Air for spring 2027, a long-term positive for AAPL. The Fed narrative is the primary market mover, with the US-Iran deal and Iraq oil supply increases providing secondary cross-currents.