The Fed held but three dissented. WTI jumped 7% on Iran. P&G said the consumer is muted. CoreWeave CDS implies 50% default risk. NextEra broke ground on a $100B nuclear site data center.
The Fed Held. Three Dissented. Oil Closed Up 7%.
The Fed voted 9-3 to hold rates. Three regional presidents voted to hike immediately. The Dow fell sharply. The S&P 500 closed down. WTI settled near $85, up roughly 7% on the day.
Iran launched missiles at U.S. forces overnight. Trump said the U.S. would hit back hard. The two-day oil relief rally is fully reversed.
Microsoft (MSFT) and Meta (META) report after the close. The market needs both to deliver on capex or the AI selloff deepens.
The Signal
Three dissents is one more than most expected. September is now base case, not tail risk. The 2-year yield held gains after the hold. The bond market is not relieved. Microsoft and Meta earnings are the next test. They either steady the tape or break it further.
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The Fed Held. Three Officials Wanted to Hike Right Now.
The Fed held rates at 3.5 to 3.75 percent in a 9-3 vote. Beth Hammack of Cleveland, Lorie Logan of Dallas, and Neel Kashkari of Minneapolis all voted to raise rates immediately. Three same-direction dissents have not happened since September 2016.
Kashkari is the notable surprise. His recent statements had signaled comfort with an extended hold. His flip to a dissent names the inflation pressure as broader inside the committee than the market had priced.
Warsh's statement was nearly identical to June's. He added nothing new. The press conference is where investors look for any signal.
What's Moving
- September hike probability jumped immediately after the three-dissent result
- 2-year Treasury yields held gains rather than falling on the hold
- The statement again described economic activity as expanding at a solid pace
The Read
A hold with three dissents is the institutionally hawkish version of a hold. September 15-16 is the next meeting. Microsoft and Meta's capex commentary after the close either add inflation pressure or relieve it. Warsh's next move depends on which way those reports land.
P&G Missed Revenue. The Consumer Is "Muted, But Stable."
Procter & Gamble (PG) missed revenue estimates and fell sharply. Sales grew just 3 percent. CFO Andre Schulten described the consumer as "muted, but stable." Shoppers are still buying, just in smaller pack sizes and waiting for promotions.
P&G built in a $90 oil assumption, projecting a roughly $1 billion earnings headwind. Iran re-escalating overnight puts that number at immediate risk.
Tuesday's Coca-Cola (KO) record and today's P&G miss describe the same consumer from opposite angles. Coke wins on brand loyalty. P&G is working harder than ever.
The Signal
Brand strength is the variable, not income tier. Consumers are concentrating spending on brands they trust most. Companies that need to discount are absorbing tariff and energy costs directly. Neither print made a Fed cut easier to justify. Both made the September hike case a little stronger.
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CoreWeave CDS Implies 50% Default Risk. AI Debt Hit $270 Billion.
Credit default swaps on CoreWeave (CRWV) hit 855 basis points, implying roughly a 50 percent chance of default over five years. Oracle (ORCL) CDS crossed 215 basis points. SpaceX (SPCX) CDS hit 185 basis points. Meta (META) and Amazon (AMZN) CDS both reached new highs.
AI-related bond supply hit $270 billion this year, nearly double all of 2025. Amazon's recent $25 billion bond sale attracted barely more orders than bonds available. The norm is four times demand.
When credit prices 50 percent default odds on the most leveraged AI name, the payback timeline is no longer a debate.
What's Moving
- Oracle bond yields on 2054 notes hit 7.8%, up nearly a full point this year
- Microsoft (MSFT) has not issued bonds since 2017 and carries AAA ratings. The standout exception
- BlackRock's Meta data center bond priced near junk-equivalent yields this week
The Read
Equity investors are buying the AI growth story. Credit investors are charging junk-adjacent yields for investment-grade AI debt. Both cannot be right for long. Meta earnings after the close are the first direct test of which market is ahead of the other.
NextEra and Brookfield Are Building a $100 Billion Data Center on a Nuclear Site.
NextEra Energy (NEE) and Brookfield (BAM) announced a $100 billion data center campus at the former Paducah nuclear weapons site in Kentucky. The site already has transmission capacity, water, and fiber infrastructure.
NextEra delivers 2 gigawatts of natural gas power and 2.6 gigawatts of battery storage. Brookfield owns and operates 1.8 gigawatts of compute capacity. Expected completion is 2032.
PJM warned Monday that data centers without new power supply face outages starting mid-2027. This deal is the specific "bring new supply" solution PJM demanded.
What's Moving
- Existing site infrastructure speeds development past the bottleneck slowing other projects
- The project fulfills Trump's Ratepayer Protection Pledge, keeping costs off household bills
- GE Vernova (GEV) is the likely turbine supplier, with gas turbines booked through 2030
- No hyperscaler tenant has been named yet
The Read
The tenant announcement is the next catalyst. Microsoft, Meta, Google, or Amazon are the candidates. A named tenant turns a construction announcement into a committed balance sheet event for whoever signs. The 2032 timeline means this is infrastructure for the next AI generation, not a 2027 fix.
Porter Stansberry's Critical New Warning:
Trump Is Replacing The U.S. Dollar
"The last time America reset its money, it created 1,300 millionaires every day. This could be bigger."
Iran Launched Missiles. Trump Said Hit Hard. WTI Closed Up 7%.
Iran launched ballistic missiles at U.S. forces in Jordan overnight. All were intercepted. U.S. and Saudi forces then struck logistics sites in Iraq. Trump said the U.S. would hit Iran hard.
The two-day diplomatic pause is over. WTI closed near $84, reversing Monday and Tuesday's decline entirely.
P&G's assumed $90 oil for the coming year is no longer conservative. It is the base case.
What's Moving
- Lockheed Martin (LMT), Raytheon (RTX), and Northrop Grumman (NOC) benefit from Patriot replenishment
- Mortgage rates hit a one-year high as yields respond to oil-driven inflation
- Chevron (CVX) and ExxonMobil report Friday into a market where the supply shock just reactivated
The Read
The Fed held today with three hawks voting to hike. WTI jumped 7% on a new Iran attack. Both events landed on the same day. September is now the base case. Microsoft and Meta's numbers after the close give Warsh either a reason to wait or a reason to move sooner.
The Fed held and three officials still voted to hike. WTI closed up 7% as Iran broke the ceasefire again. P&G said consumers are muted. CoreWeave is pricing 50 percent default odds. NextEra is building a data center on a former nuclear weapons site.
Microsoft and Meta report after the close. The week is not done.
