Archax Weekly Market Update, June 29, 2026

Markets open the final week of H1 with cautious optimism after a weekend of Iran escalation and de-escalation that has become the defining rhythm of 2026. Tit-for-tat attacks over the Strait of Hormuz, Iran striking a container ship, the US retaliating, Iran hitting a Qatari tanker, gave way Sunday to a mutual agreement to stand down ahead of resumed talks in Doha. Last week Brent fell around 10% as tankers resumed transiting Hormuz and Gulf exports recovered to nearly two-thirds of pre-crisis levels. Crude has now reversed almost all its war-induced gains. The macro relief markets have been pricing for months is arriving in the real data.

US May PCE came in at 4.1%, the fastest pace in over three years, with core at 3.4%, its highest since October 2023. Hot numbers on paper, but the key context is that oil is now falling. Fed chair Warsh makes his first appearance outside the US at Sintra this week, with questions on rates, financial stability and AI bubble risks on the agenda alongside the ECB's Lagarde and other major central bank heads. The US jobs report Thursday is the other major test with 130k US jobs forecast for June, normalising from May's 172k which was partly a World Cup hiring effect. For UK markets specifically, the easing in energy prices is feeding through, with lower pump prices lifting consumer sentiment from May's record lows, taking pressure off the Bank of England's rate path and offering some relief to a mortgage market stretched by war-driven borrowing costs since February.

The AI structural demand thesis is being validated heading into H2. Micron hit a record high after blowout results, with its CEO flagging very large customers entering longer-term supply agreements and demand set to exceed supply into 2028. SK Hynix is planning a $29 billion Nasdaq ADR listing with trading expected July 10, bringing the AI memory trade to a global investor base. South Korea announced large-scale investment plans across chips, data centres and robotics. The AI trade is broadening even as the broader market digests last week's rotation out of this year's top performers.

Crypto closes H1 as the half year's worst trade. Bitcoin is back below $60,000. Strategy's mNAV has broken below 1.0 for the first time, meaning its enterprise value now sits below the value of its Bitcoin holdings and the financing flywheel that powered years of accumulation has broken. Cash reserves of $1.4 billion sit against $1.7 billion in estimated payments over the next year. June ETF outflows reached $4.06 billion, the worst month on record, bringing the May-June two-month total to $6.5 billion. The typical IBIT investor is sitting on losses of around 40%. Glassnode flagging a fundamental behavioural shift with institutions now reducing exposure into the drawdown rather than buying the dip, a reversal of every previous cycle. BitMEX cleared out its entire senior leadership this week, echoing the 2022 crypto winter. Bitcoin is down 30% in H1, Strategy stock down 45%, the worst performing major financial assets of the half year.

H1 2026 has been defined by three things: the Iran war reshaping macro and rates, the AI semiconductor trade carrying equities to record highs on increasingly narrow breadth, and the collapse of the crypto bull market that began with Trump's election. Heading into H2 three questions define the outlook: does the Iran deal hold and oil normalise fully, does the AI trade broaden beyond semiconductors, and does crypto find a structural floor or continue its institutional exit. Sintra and Thursday's US jobs report will set the tone for how the second half begins.