In this July 9, 2026 morning market commentary, Kenny Polcari opens on a sunny Cape Cod backdrop and delivers a rapid-fire update on the day's financial landscape. He notes that U.S. equity indices fell sharply— the Dow down 575 points, the S&P down 21, the Russell down 26, while the Nasdaq modestly rose 52— as a renewed flare‑up in the Iran‑U.S. conflict pushed oil prices up to the mid‑$70s per barrel. Polcari explains the geopolitical escalation: U.S. strikes on Iran, Iranian retaliation, and the resulting market volatility. He then shifts to the Federal Reserve minutes, highlighting the removal of forward guidance, the decision to keep rates unchanged, and a rising probability (≈50%) of a September rate hike, signaling a return to a Greenspan‑style, inflation‑first stance. He weaves a “chain reaction” narrative: higher oil → higher inflation expectations → tighter Fed policy → heightened equity volatility and valuation pressure. He provides current technical levels for oil (support $70.45, resistance $81.40), gold (holding above $4,000 at $4,105), and bond yields (2‑year 4.19%, 10‑year 4.58%, 30‑year 5.08%). Upcoming economic data—initial and continuing jobless claims and existing home sales—are noted as near‑term catalysts. Polcari offers a free portfolio review via a phone call, urging listeners to assess risk tolerance. The segment closes with a personal lifestyle note, describing an Umbrian‑style mussels recipe he will prepare for dinner, complete with ingredient list and cooking steps. Throughout, the tone shifts from analytical to urgent to persuasive, underscoring both market risk and a call to action.
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Well, good morning. Yes, it's me, Kenny Polcari, your host of the party. And today is another beautiful day here on the Cape. Look at that water behind me. Look at the, the sky behind me. It is blue. There's not a cloud in the sky. It is absolutely gorgeous. And today is July 9th, 2026. And here are the things that you need to know to keep— to get your day started. Well, markets were under pressure as the conflict in Iran heated up again. Fed, well, their minutes reveal a new tougher Fed, so we can expect less forward guidance. Oil is up, gold is up, bonds are down, and yields are higher. And what do we have for dinner tonight? We're gonna have the Umbrian mussels. Okay, well, yesterday was a perfect 10 on Cape Cod, but less so for the markets. The Dow lost 575 points, the S&P down 21. The NASDAQ though did gain 52 points after have gotten beaten up the last couple of days. The Russell lost 26. The transports gave up 39. The equal-weighted S&P got whacked, losing 102 points, while the Mag 7 gave back 183 points. The headlines are going to tell you that stocks sold off because of the latest drama with Iran. Well, that's true, but it's only part of the story. Yesterday wasn't just one story, it was two stories that suddenly became one. A renewed flare-up in the Middle East sent oil surging just as investors were about to digest Chairman Walsh's first Fed meetings. Now, together they forced investors to rethink inflation, rethink interest rates and risk all at the same time. But let's start with Iran. Look, we've been here before, right? The relationship or the truce, depending on the day, has been this on-again, off-again relationship for months now. But yes, it just felt a little bit different. Speaking from the NATO summit in Turkey, Trump said that the US had struck Iran hard overnight and suggested that we'd probably do it again. These comments came just hours after fresh US strikes and the decision to revoke the waiver allowing Iran to continue selling oil on the global market. So markets were already on edge. A direct response, and that was all a direct response to the IRGC attacks on the commercial shipping in the strait. When asked what comes next though, Trump didn't leave much to the imagination. He said, "We're probably gonna hit 'em again hard." Tonight. And that's exactly what we did. The US launched another round of attacks and strikes on Iran last night, hitting military targets, while Iran retaliated with attacks on US military facilities in Kuwait and Bahrain. Now, he also had more to say, but you get the picture, don't you? Because this, this ended up going back and forth. Not exactly a show of de-escalation. The market reacted exactly the way that you would expect. Stocks sold off, bond prices fell, yields rose, and volatility picked up. Later in the day, Trump suggested that he did not expect the situation to evolve into a broader regional war, and so therefore then stocks recovered a bit, taking back some of their losses that they had experienced early in the day. But remember this: while the geopolitical headlines can create, and they often do create, these sharp emotional moves in the short term, history tells us that they rarely determine the market's long-term direction. And I've talked about that over and over. What ultimately matters is whether those headlines become an economic problem, and in this case, that means for the price of oil, which spiked higher yesterday, ending the day at $73.50. It is now up more than $6 or 9% off the recent lows down at $67-ish, right? So if oil begins marching back towards $100 a barrel, then inflation expectations change, corporate margins can come under pressure, consumer spending gets squeezed, and suddenly this becomes much more than just another geopolitical headline. Now, if oil settles back down, then this argument all but goes away, right? But until that happens, expect that the markets are going to remain anxious. Now, then next was the Fed minutes, and they hit the tape just like I said at 2:00 PM. But the media had been talking about what the expectation was all day. Everybody speculated on what they thought it would reveal. And what they revealed is that Warsh did exactly what he told us he was going to do. He stripped away virtually all forward guidance, right? He wants the Fed to say less and let the economic data say more. Now, a handful of officials apparently argued that there was legitimate case for raising rates immediately, but we kind of knew that because that had been out there, right? But in the end, they didn't win the argument. The committee voted, as we know, to leave rates unchanged at 3.5, 3.75. But that's not really the point. The bigger takeaway is that inflation remains the Fed's primary concern, and yesterday's spike in oil prices, uh, only reinforces that concern. Now, famed strategist Ed Yardeni warning us that a real rupture in the ceasefire risks reaccelerating price growth, which would force the Fed's hand towards hiking rather than cutting, which is now the underlying narrative and theme, right? And Fed fund futures agree. They're now assigning a roughly 50% probability of a September rate hike, a dramatic shift from where we were just a week ago. Now, more importantly, the minutes reinforce what we've been discussing ever since Kevin became the chairman. He is trying to break investors of the habit of expecting the Fed to run to the rescue every time it gets nervous. No promises, no forward guidance, no hint that rate cuts are automatically coming just because Wall Street is stamping their feet. And if inflation refuses to cooperate or gets another boost from these higher energy prices, the Fed appears to be perfectly willing to leave policy restrictive for longer or possibly even tighten if necessary. To me, that's a return to the Alan Greenspan era, and we talked about that in yesterday's note. For years, investors have been conditioned to believe that every market decline would eventually be met with easier monetary policy, a mindset born during the Great Financial Crisis and then reinforced repeatedly during and after the great, uh, the pandemic, right? And I don't think that's the playbook anymore. If Kenny's taken the Fed back towards a more traditional framework where inflation comes first and markets are expected to stand on their own two feet, that's ultimately healthier for both the economy and actually for the capital markets and for investors. Now, is it going to feel comfortable? Probably not, right? Will it mean more volatility? Probably yes, right? And that means that valuations are going to matter even more, and earnings will matter even more, and investors are going to have to become much more selective when they've, uh, than they've been, say, over the past decade, 15 years. Now today, the media is going to be discussing and digesting yesterday's Fed minutes even more while keeping one eye firmly fixed on developments in the Middle East as they continue to unfold. If oil continues climbing, expect inflation concerns and bond yields to remain front and center. If tensions, uh, begin to cool at all, some of yesterday's fears could fade just as quickly. As they appeared, right? And we've seen how that happens. Now, bonds did come under a bit of pressure yesterday, and that kept yields elevated. The 2-year's yielding 4.19%, the 10-year's at 4.58%, and the 30-year remains fixed at 5.08%. All levels that are going to keep a short-term lid on stocks. Oil, that's up again this morning, trading at $74.30 after trading as high as $75.13 after the second round of strikes on Iran and Trump saying that he's no longer interested in negotiating with whoever's in charge. The market's being forced into repricing the risk of a disruption through the Strait, as well as renewed escalation of this conflict. We're now between, uh, trendline support, which is down at 70.45, and resistance, which is now at 81.40. So my idea last week of 65 before 75, well, that just got blown up. The risk now is to the upside once again, since it's clear that Iran is not interested interested in playing nice in the sandbox with anybody. Now, gold's catching a bid this morning. It's up $28 to $4,105 after successfully holding that $4,000 level that we've been discussing for a couple of weeks now. The move higher suggesting a move into the safety trade as the geopolitical uncertainty kind of intensifies. If the conflict broadens, then expect both oil and gold are going to move higher, right? If tensions ease, then some of that safety premium is going to unwind in gold just like it will in oil, just as quickly as it appeared. Economic data today includes the usual suspects—initial jobless claims and continuing claims—along with existing home sales, which are expected to be up 1%. So that's a positive, even considering rates—mortgage rates remain relatively high. European markets, they're all up this morning. US futures are mixed. Dow futures down 70, the S&P up 7, the NASDAQ is up 135, while the Russell is flat. The S&P closed at 7,482. It was down 21 points yesterday. Trendline support is down at $74.10, with short-term resistance at $75.60 and the all-time high at $76.20. My gut says that we're going to hold the support line, but if we break that, then expect us to test the June lows down at $72.80. Remember, the lesson here is don't focus on the bombs, focus on what the bombs do to oil. Don't focus on oil prices, focus on what oil prices do to inflation. And don't focus on inflation, focus on what inflation forces the Fed to do. Look, that's the chain reaction that's going to matter, and that's exactly what the market spent yesterday repricing and will also spend today repricing. You can call me at 561-931-0190 and discuss your goals, your timeline, and let's assess the risk in your portfolio versus your tolerance in the volatility in the markets. And always happy to do a portfolio review, right? Free portfolio review and risk assessment for you. Okay, anyway, so we're having dinner tonight. Oh, we're here in the Cape. The, the day is beautiful. I can go out there and get the mussels because we're going to have Umbrian-style mussels. Now, it's an easy dish to make, and it should be served with toasted garlic bread, a big salad, and a glass of chilled rosé on a day like today. You could serve it as an appetizer, you could serve it as a main dish, however you like. It's always, always an easy and simple, and it's always a winner. For this, you need 2 pounds of fresh mussels. Now here's the deal, if they're really fresh, like going right out there to get them, you're gonna have to scrub them and remove any sand and make sure that you remove the beard, you know, the little beard that sits on the end. Once you clean them, you're going to strain them, set them aside in a pot of cool water, and just let them sit there while you prepare the rest. Now, you're also going to need olive oil, you need onion, you need garlic, you need dry white wine. You know me, Pinot Grigio, Santa Margherita. You need a half a cup dried sun— uh, diced sun-dried tomatoes, uh, in the oil. You need red pepper flakes if you want it hot. You need fresh parsley. And this preparation calls for diced Suprasata as well. Now, Suprasata is an Italian dry salami that you can buy in any butcher, uh, in a large grocery store, but it is not pepperoni. Anyway, for this dish, it's really quite simple. You want to begin by heating up the oil in a large pot. Once the— but once the oil and the butter come all melted, add in the chopped garlic and the diced onion. Sauté that for about 5 minutes. Next, you're going to add in the diced Suprasada and the diced sun-dried tomatoes. You're going to sauté that for another 5 minutes or so. Now here's where you're going to add in the pepper flakes if you want it hotter or a little spicier. If you don't, don't worry about it. Some people also, they'll use pancetta instead of Suprasada, which is okay, except that it's going to give it a whole different flavor and texture. So for this dish, it really calls for Suprasada. Next, you're going to add in 1.5 cups of the wine, bring it to a boil. Once it boils, you're going to add the mussels, cover the pot with a tight lid, reduce the heat to medium and cook it for about 5 to 8 minutes. Remove the lid, stir the mussels around a bit, cook them for another 5 minutes. Once they're done, you're going to check for— make sure they're all open. Any unopened mussels, you want to discard them, uh, right away. At this point, you're going to add in the chopped parsley, right, because that adds color and finishes the dish. While the mussels are cooking, you're going to make the garlic bread with slices of fresh Italian pane di casa. You're going to toast it in the oven and then slice it in half Serve it in the basket in the center of the table for the guests all to enjoy, and make sure that you have plenty of rosé wine to enjoy with this dish. Oh my God, sounds delicious. That's what I'm making for dinner tonight on a day like today. Until tomorrow, take good care.
