Quick housekeeping note before we get started. The U.S. stock market was closed Friday for Juneteenth, so this week’s closing prices are Thursday’s. The week was four trading days long. That actually fits the story it tells. Let’s get into it.
1. A week that felt like chaos and finished up 2.4 percent
The Nasdaq closed last Friday at 25,888. It was up big Monday morning on optimism around a U.S. and Iran peace agreement, opening more than 500 points higher and climbing through the day to close at 26,684. On Tuesday it hit the week’s intraday peak above 26,780 before fading to close at 26,376. On Wednesday it fell hard to close at 26,021, after the Federal Reserve removed some language from their policy statement. On Thursday it more than recovered the Wednesday loss, closing at 26,517 — led by a comeback in chip stocks. The market was closed Friday for Juneteenth.
Net for the week: Nasdaq was up 629 points, or about 2.4 percent. A genuinely strong week. But if you watched the daily moves, you would not have guessed that. This is also why you need rules: no FOMO when the stock market takes off and no panicked selling when outside news creates a bad day. During the week from Tuesday’s high above 26,780 to Wednesday’s low near 25,960 was roughly 800 points of directional swings inside the week. Most investors who held through this week probably felt much worse than the actual outcome justified. That is the most important thing I want you to see about this week, before we talk about anything else.
Now let me walk you through what actually happened, because the story inside the big moves is one this column has been telling for five weeks straight.
Monday opened on news that the U.S. and Iran were close to a peace agreement to end the war and reopen the Strait of Hormuz. Trump announced it on Sunday, with Pakistan’s prime minister as a confirming voice (note: this felt odd to me because Iran leaders were not part of the confirmation). By Monday’s close, the Dow had risen 469 points to a record. The S&P 500 jumped 1.65%. The Nasdaq added 3.07% in a single day. Personally, that was great timing for me as I had to pull out some money Monday evening to cover the costs of college for my son who is off to Warren Wilson in the fall. Globally, every major index was green. Oil dropped significantly on hopes, the big price increase that resulted when the war started, would fade.
Tuesday hit the week’s intraday peak above 26,780 before fading to close at 26,376. SpaceX, which had just gone public the prior Friday, briefly carried a market capitalization above $3 trillion in after-hours trading. The optimism that Sunday’s deal would hold was driving prices across the board.
A quick word on how the Federal Reserve actually communicates, because the next part of the story depends on it. After each meeting, the Fed releases two documents that markets read very closely. The first is the policy statement — a short formal release that explains the Fed’s decision on interest rates and gives language about what direction they are leaning next. When that language tilts toward cutting rates, the market calls it an easing bias or says the Fed is dovish. When it tilts toward rate hikes, it is a tightening bias or hawkish.
The second document, released four times a year, is the dot plot. It is a chart where each of the 18 Federal Reserve officials anonymously marks where they think interest rates should be over the next few years — one dot per official, per year. Markets watch both the statement and the dot plot because the words and the dots together signal what the Fed is likely to do at upcoming meetings, often more than the current rate decision itself.
Now on to Wednesday which changed everything for the markets. The Federal Reserve held interest rates steady. This was expected. What was not expected was the change in the policy statement and the dot plot. The easing bias that had been guiding markets toward future cuts was removed entirely from the statement. The updated dot plot showed nine of 18 Fed officials now project rate increases in 2026. The median expectation still shows one 25 basis point cut by year-end, but the composition under that shifted to the hawkish side. Three Fed officials dissented on the rate decision itself. Chair Kevin Warsh, presiding over his first FOMC meeting, abstained from submitting his own rate forecast. As a side note, and not meant to be political, Kevin Warsh is President Trump’s guy. Trump did not like Fed chair Powell and always pressured him to cut rates. Powell would not be influenced. Trump put in his own person as chair and, what changes………….rates might go up. Kind of funny outside of politics and the markets.
We have talked about how the market prices things in. Prior to Wednesday, the markets had been pricing in eventual cuts. This change forced that same market to reprice in real time. The Dow lost 507 points on the day. The S&P 500 fell 1.21%. The Nasdaq dropped 1.34%. Growth stocks, which had been running on the assumption that cuts would eventually come to support them, took the worst of it.
Thursday, as a reminder the last trading day of the week, more than recovered the Wednesday loss. Chip stocks led the comeback. The Nasdaq rose almost 2% on the day, adding 496 points after dropping 354 the day before. The recovery was driven less by new good news and more by traders absorbing the Wednesday news, finding that nothing more had broken, and stepping back in.
And that brings us back to the destination. By Thursday’s close, the Nasdaq was up 629 points for the week despite the Wednesday selloff. The Iran-driven gap up on Monday was so strong that the Fed news could not erase it. A market that processed an Iran peace announcement, a record close on the Dow, the largest IPO in history continuing to extend, a Federal Reserve removing its easing bias, and a 500-point Dow drop — all in four trading days — still finished the week up nicely.
This is the pattern this column has been describing for several weeks now. Two weeks ago I wrote about a strong jobs report killing the hope that the fed would cut rates. Last week I wrote about chip stocks selling off out of the same fear that rates would stay high, and about headlines moving markets on news that had not yet happened. This week, the Federal Reserve officially confirmed what the bond market had already been pricing in for a month. The arc has now completed itself. The era of waiting for rate cuts is, for the moment, over.
Here is what I want you to take from this week. A reader who only saw Friday’s close one week to Thursday’s close the next would see a 2.4 percent gain and assume things went smoothly. A reader who watched every minute of every day would have lived through what felt like a hurricane. The market was the same in both cases. The wear and tear was not. The disciplined investor watched the same week and did almost nothing. The undisciplined investor probably made several trades trying to capture or avoid the swings. One of those investors is finishing the week with a clean 2.4 percent gain and some sanity. The other is finishing the week probably with similar returns and a bit of emotional exhaustion.
Rules built before a volatile stretch are the rules that hold during one. Rules invented during the stretch are usually trouble.
2. The Iran story continues to write itself
Last week I noted that as I was writing the post, Trump had said a peace deal would be signed Sunday and Iran had said it was cautious on timing. I wrote: this is noise today that could be fact by tomorrow and move the markets on Monday.
That is precisely what happened. As discussed above, the week opened on the deal looking likely to happen. The Memorandum of Understanding (MOU) between the U.S. and Iran was actually signed Thursday in France by Presidents Trump and Pezeshkian, with Vice President Vance and Iran’s parliament speaker signing digitally. Then on Friday morning, the implementation talks scheduled for the Bürgenstock resort in Switzerland were canceled. Vance pulled out citing logistical issues. Iran reportedly canceled its delegation independently. Switzerland’s foreign ministry confirmed the meeting would not proceed as planned.
Friday morning brought a separate headline that the U.S. had also reportedly brokered a ceasefire between Israel and Hezbollah. Oil prices fell again on the news.
That is now seven distinct shifts in the Iran story in about ten days. Deal close. Drone strike. Deal close again. Vance softening the framing to preliminary. MoU actually signed. Switzerland implementation talks canceled. Israel-Hezbollah ceasefire reported. Every two days, a new chapter. The market reacted to each turn.
The reason I keep coming back to this story is not because the geopolitics is the point. The point is what the geopolitics teaches about reading markets. Almost none of these shifts changed the fundamental value of any specific company. Oil companies saw their stocks move on each twist, but the underlying businesses produced oil at the same rate either way. The defense sector, the airlines, the consumer staples — all of them moved in line with the headlines, even though the headlines were not changing what any of them sold, produced, or earned.
The disciplined investor watches the noise, looks for the underlying fact, and waits for the data point that actually changes a company’s fundamentals before acting. So far across two full weeks of Iran headlines, almost none of it has.
3. A coworker asked me about buying SpaceX
This week a coworker asked me whether he should buy SpaceX. We talked about this last week. The stock had gone public the prior Friday at $135 a share, opened the first day around $150, peaked above $225 on Tuesday, and by the time he asked me, was settling somewhere in the middle. The question was reasonable. The story is everywhere. The numbers look extraordinary. He wanted to know what I thought.
Here is what I told him, more or less. By traditional rules for evaluating a company — price to earnings, price to revenue, growth rates relative to multiple — SpaceX makes very little sense at these prices. Even using the IPO price of ‘only’ $135, you were buying the company at roughly 40 times its trailing revenue and 175 times adjusted earnings. The S&P 500 historically averages a price-to-earnings ratio around 15 to 20. By those measures, SpaceX is unbelievably overvalued.
However. This is an Elon Musk company. And the track record of Musk companies and traditional valuation is not what you might expect. Tesla has traded at a price-to-earnings ratio above 350 for years. Conventional analysts have called it crazy overvalued for almost the entire time it has been public. They have been wrong, mostly, for sixteen years running. The story has worked. Whether the underlying earnings eventually justify the price is still being decided. But the price has not broken on the conventional logic. So when I look at SpaceX trading at a similar story-stock multiple, I cannot say with confidence that traditional rules will apply this time. Maybe they will. Maybe they will not.
My honest answer to my coworker was that there is no way to really know. That feels unsatisfying as an answer because most finance writers cannot bring themselves to land on it. But it is the truthful answer when it is the truth. We do not know.
And here is something else worth knowing that ties into the broader picture. This week SpaceX announced a $60 billion acquisition of Anysphere, the company behind the Cursor AI coding platform, using its newly-public stock as the currency. People often forget what an IPO actually does for the company going public. Yes, it raises cash. But it also gives the company a publicly-traded stock to use as currency for acquisitions, employee compensation, and future capital raises. SpaceX raised $85.7 billion in cash from the IPO once the underwriters exercised the greenshoe option, and within days they used the new shares to spend $60 billion on a major AI buy. That is not a side effect of going public. That is one of the main reasons companies go public in the first place. Whether the deal proves smart is another question. But it shows you the IPO machine working. It also helps to diversify SpaceX revenue away from the satellite infrastructure we spoke about last week. Most of the SpaceX revenue does not come from AI or Space. This acquisition changes the game.
So back to my coworker’s question. If the answer is that we do not know, what do you actually do with that? Here is what I told him, and it is the same rule I have followed for years. Cap the speculative/risky side of any portfolio at around 5 percent. The other 95 percent stays disciplined. Inside that 5 percent you can chase, take risks, buy a SpaceX or anything else that excites you. If it works, great. If it does not, your retirement is intact. The point is not to never take risks. The point is to make sure no single risky decision can take you down.
To me it is somewhat like a trip to Las Vegas. Set out for the evening willing to lose a fixed amount at a blackjack table. It is your entertainment budget for the evening. If you lose that, walk away having had a fun night. The same is true of this 5% set aside to take some risks with.
I wrote about that same rule in the very first Weekly Notes a month ago. Bringing it back now feels right, because the application is more concrete this time. In Week 1 it was an abstract framework. This week it is the practical answer to a specific question from a real person.
This was already on my list for the week. Thursday afternoon CNBC ran a piece pulling out the data — the average open-market SpaceX buyer is now essentially breakeven, with the volume-weighted average price across the first five days right around $182 and the stock closing Thursday at $185. The pattern from Cerebras discussed in the first weekly notes has started repeating itself, just at a smaller scale. The hype crowd chased. The disciplined crowd waited. The disciplined crowd is in better shape than the hype crowd.
I do not know if my coworker will buy SpaceX. I do not think he knows either. The decision is not in the buy or not buy. The decision is in knowing what part of the portfolio it belongs in if he does, and being able to live with either outcome. That is what discipline is. Not avoiding decisions. Making them with eyes open about what you are actually betting on.
Sometimes “I do not know” is the most disciplined answer there is, when it comes paired with an applicable rule.
See you next Saturday.
Nothing here is personalized financial advice — just one person’s notes. The companies named are examples, not recommendations. Always do your own homework before you invest.
Weekly Notes — July 11, 2026