No US-Iran peace, No US Market Rally ! Reports ?

This post continues from where my Tue, 23 Jun 2026 post left off. Click here ! to read again.

Following the cancelled 20 Jun 2026 US-Iran peace ceremony, a temporary Swiss-mediated agreement granted a 60-day sanctions waiver for Iranian oil in exchange for UN inspector access.

This caused Brent crude to drop by -8.7% early in the week, bringing temporary relieft to pump prices.

With the call off, the narrative has been less about a clean breakthrough and more about a fragile, stop-start implementation.

Technical talks that were supposed to continue, got delayed as Israel–Lebanon violence and Iranian demands over implementation complicated the process.

By 24 Jun 2026, US State Secretary Rubio said that technical negotiators would resume at month-end.

US-Iran diplomacy had become more guarded: keep Gulf security intact, continue technical negotiations, and avoid overpromising a final settlement.

By Fri, 26 Jun 2026, the fragile truce was “tested” when Trump ordered retaliatory US military strikes after Iran targeted s Singapore registered cargo ships passing the Strait of Hormuz.

Besides the Middle East flaring tension still dampening sectors in US market on and off, the other factor will be US economic reports.

For last week, the following reports were released:

• Tue, 23 Jun 2026 - US Flash Manufacturing PMI for June 2026.

• Tue, 23 Jun 2026 - US Flash Services PMI for June 2026.

• Thu, 25 Jun 2026 - US Q1 2026 GDP’s third & final estimates.

• Thu, 25 Jun 2026 - US jobless claims, weekly & continuing.

• Thu, 25 Jun 2026 - US Personal Consumption Expenditure for May 2026.

• Fri, 26 Jun 2026 - US Advanced Economic Indicators report for May 2026.

US Flash Manufacturing PMI.

US’s June 2026 manufacturing PMI came in at 55.7 vs Wall Street consensus of 54.6 vs May 2026’s 55.1.

According to the flash reading, its highest since May 2022.

The expansion implies factory business conditions have improved continually since last August with the rate of growth steadily improving from February 2026’s recent low.

Unfortunately it is not all good news, the report also highlight a major warning sign - factory employment fell to a 6 year low due to rising operating costs & global demand concerns.

The factory job cuts nearly reached levels not seen since the COVID-19 pandemic & the 2009 financial crisis, with the caused pinned largely on rising operating costs.

US Flash Services PMI.

The June 2026 report reveals US service sector grew at a subdued but improved pace.

The S&P Global Flash US Services PMI increased to 51.3 (a 4-month high) from May 2026’s 50.7, also topping market forecasts of 51.0. (see above)

Key takeaway from the report includes - (a) continual service sector expansion in (b) subdued pace, due to low consumer confidence and customer push-back on high prices.

Like manufacturing PMI, subdued “service” activity and high prices have led to staffing cuts in the process.

US Q1 2026 GDP (Final)

According to US’s Bureau of Economic Analysis (BEA), Q1 2026 real GDP growth (final) was revised up to +2.1% QoQ in the 3rd estimate. (see above)

This is up by +0.5% from the 2nd estimates of 1.6% and has come in marginally higher than thee 2.0% advance estimate.

When delved deeper, the major factor behind the upward revision was:

• A large downward revision to import growth to 11.8% from 21.1% in the 2nd estimate.

• The downward revision in imports was accompanied by a much smaller downward revision in export growth (10.9% vs 13.1%).

• Thus, leading to a meaningful downward revision to the trade deficit.

Catalysts:

BEA stated that the downward revision to imports was widely spread in:

• Goods (led by imports of consumer goods ex food & autos).

• Services (led by international travel).

GDP by industry

From an industry perspective, the increase in real GDP reflected increases in real value added of:

• 7.5% percent for government.

• 4.5% for private goods-producing industries.

• 0.8% for private services-producing industries.

The leading industry contributors to the increase in real GDP were:

• Information.

• Federal government.

• Professional.

• Scientific, and technical services.

• Durable goods manufacturing.

The leading offsets were decreases in:

• Retail trade,.

• Wholesale trade.

• Finance and insurance.

Jobless Claims.

The 25 Jun 2026, reports revealed a resilient but cooling US labour market.

While initial layoffs unexpectedly slowed, continuing claims rose to a 3-month high, reflecting a trend of low firing and reduced hiring.

Weekly claims.

For week end 20 Jun 2026, weekly claims dropped by -12,000 to 215,000 (seasonally adjusted) vs market forecast of 225,000, vs last week’s upwards revised 227,000. (see below)

This signals that mass layoffs remain historically low.

The 4-Week Moving Average rose slightly by +750 to 224,250.

This metric smooths out week-to-week volatility to show the overall trend. The steady rise here over recent months points to a gradual, ongoing softening in the labour market.

Continuing claims.

For week ended 13 Jun 2026, continuing claims rose by +21,000 to 1.821 million, hitting the highest level in 3 months.

Latest numbers comes in higher than Wall Street estimates of 1.8 million and previous week’s downwards revised 1.8 million. (see above)

Narrative for continuing claims remain the same - it is taking longer for the unemployed to find new jobs.

The jobless rate has held at 4.3% for ​3 straight months. The lack of strong hiring has ​left many ⁠out-of-work people enduring long spells of unemployment.

The US Dept of Labour report also reveal median duration of unemployment jumped ​to 11.6 weeks in May, the longest stretch since November 2021, from 11.0 weeks in April.

Should this raise concerns ?

Personal Consumption Expenditure (PCE).

US Bureau of Economic Analysis (BEA)’s May 2026 Personal Consumption Expenditures (PCE) report reveals that US inflation re-accelerated to its highest level in 3 years. (see above)

The persistently "sticky" inflation has prompted financial markets to price in the possibility of further interest rate hikes by US Federal, later in the year.

Debate in Wall Street has turned to whether will it be one or two hikes by end 2026 and how soon will it arrive ?

For May 2026: (see above)

(a) Headline inflation.

• MoM : increased by +0.4% vs analysts’ consensus of +0.5% vs April 2026’s +0.4%, that is -0.1% below Dow Jones consensus estimate.

• YoY : increased by +4.1% vs forecast of +4.1% vs April 2026’s +3.8%. Latest primary inflation was the highest since April 2023.

(b) Core inflation.

• MoM : increased by +0.3% vs Wall Street consensus of +0.3% vs April 2026’s +0.3%.

• YoY: increased by +3.4% vs forecast of +3.4% vs April 2026’s +3.3%. Latest core annual reading was the highest since October 2023.

According to Navy Federal Credit Union, Chief economist, Heather Long:

• Inflation is at a 3-year high due to the war in Iran and it’s painful for middle-class and moderate-income Americans.

• People are spending more on gas, along with healthcare and utilities.

The unexpectedly strong consumer spending paired with sticky inflation has kept the possibility of future Fed’s interest rate hikes in play, to cool US economy.

Advanced Economic Indicators.

https://www.census.gov/econ/indicators/2026/advance_report2605.pdf

The May 2026 details a widening international trade deficit and a steady buildup of business inventories.

It points to strong domestic consumer demand that is currently being met more by foreign imports than by domestic exports.

Key takeaways from report:

(1) Widening Trade Deficit:

• The international goods trade deficit surged to a 14-month high of -$105.8 billion.

• This was much worse than the anticipated $85 billion deficit and significantly higher than April 2026’s -$83 billion.

Import Spike:

• Goods imports jumped +3.6% to $313.4 billion, indicating robust domestic consumer spending.

Export Decline:

• Goods exports declined by -5.4% down to $207.7 billion.

(2) Inventory Shifts:

• The advance report on wholesale & retail inventories showed continued modest growth.

• Wholesale inventories rose by +0.3%.

• This indicates that businesses are managing supply pipelines and keeping shelves stocked despite volatile international trade conditions.

• Advance retail inventories increased by +0.6% to $832.2 billion, signaling that retailers are steadily rebuilding their stocks, while preparing to meet accelerating consumer demand, which will likely provide a positive contribution to second-quarter GDP growth.

Overall, latest data or report, suggests robust domestic demand despite a growing imbalance between imports and exports.

My viewpoints : (mine only)

Without a binding peace deal, US market will be at the mercy of the geopolitical factor.

Rising oil price.

Oil futures edged higher during the market open on 28 Jun 2026, after fresh attacks by both Iran and the US post 25 Jun 2026 attack on a Singapore registered vessel.

August futures contract for WTI opened +$1.27 per barrel higher at $70.50 per barrel.

Same for ICE August Brent opened up +$1.15 per barrel at $73.14 per barrel.

Truce again ?

Latest update is both US & Iran decided on a truce (once again !) as both sides seek to come back to the drawing board again. (see below)

This is the “stop-start” that I have mentioned earlier on in the post; where the path to eventual peace is not going to be linear.

US jobless claims & labour market.

After following through US jobless claims for a while, the gnawing questions I have are:

• Will US be able to successfully bring jobless claims further down OR

• Is this the “best” US government can do - be it Trump or subsequent President ?

It is because the skill set demand has evolved and those unemployed is simply not a match.

With the inevitable “market driven” push for AI-adoption lead to a prolong and rising continuing claims as the months and years progress ?

Optimistically speaking, the full transition in the AI-labour movement will still take a bit of time to fulfill, in the meantime, strike while the iron is hot and try to make a killing, right ?

Remember to check out my other posts. (See below). Help to Repost ok, Thanks.

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• Do you think an eventual “stable” peace deal between US & Iran is attainable ?

• Do you think it will be a boom or bust for the US market this week ?

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