Key Takeaways
- U.S. inflation cooled significantly in June, with the Consumer Price Index (CPI) falling 0.4% month-over-month, the largest decline in four years, bringing the annual rate down to 3.5%.
- Federal Reserve Chair Kevin Warsh signaled a "no tolerance" policy for high inflation during his first Congressional testimony, vowing to "unstick" sticky prices while monitoring the disruptive impact of AI on the labor market.
- Uber Technologies (UBER) is in advanced negotiations to acquire German rival Delivery Hero (DLVHF) in a deal that could be valued at approximately €10 billion ($11.6 billion).
- President Donald Trump reversed plans for a 20% toll in the Strait of Hormuz, opting instead for "massive" investment deals with Gulf nations as U.S. strikes continue against Iranian targets.
- U.S. military forces are scheduled to exit Iraq by September 30, as the administration pivots toward a corporate-led partnership focused on Iraq's energy sector and oil production.
Fed Chair Warsh Confronts "Sticky" Prices Amid Cooling Data
Federal Reserve Chairman Kevin Warsh addressed Congress on Tuesday, emphasizing that while recent data shows a welcome decline in headline inflation, the central bank's mission is not yet accomplished. Warsh stated that his primary objective is to ensure that temporary price changes do not broaden into long-term inflation, specifically targeting "sticky prices" that have remained resistant to previous rate hikes.
Warsh also highlighted the dual nature of Artificial Intelligence (AI), noting it may be "disruptive for jobs in the near-term" but will ultimately create new opportunities. He described AI infrastructure spending as the "most striking feature" of the current economy, though he warned that spiking demand for semiconductors is currently driving up costs for consumer electronics.
Uber Moves to Consolidate Global Delivery Market
Uber Technologies (UBER) is reportedly nearing a definitive agreement to acquire Delivery Hero (DLVHF), a move that would significantly consolidate the global food delivery landscape. The deal, which could be announced as early as this week, follows months of Uber building a stake in the Berlin-based company, which now stands at nearly 37%.
Shares of Delivery Hero surged over 5% in Frankfurt following the confirmation of advanced talks, while Uber's stock saw a slight decline of 3%. Analysts suggest the acquisition is a strategic move to counter the international expansion of DoorDash (DASH), though the deal is expected to face rigorous antitrust scrutiny in Europe and the Middle East.
Trump Reverses Hormuz Fee in Favor of Gulf Investment
In a significant policy shift, President Donald Trump announced he would scrap a proposed 20% "reimbursement fee" for cargo transiting the Strait of Hormuz. Following "highly productive" talks with Middle Eastern leaders, the administration will instead pursue trade and investment deals with Gulf states, which Trump characterized as "MASSIVE" and more beneficial than a transit fee.
The announcement came as oil prices pared earlier gains, despite reports of fresh explosions in Andimeshk and Qeshm Island within Iran. The U.S. continues to maintain a blockade on Iranian shipping while keeping the strait open for other international traffic, a move intended to pressure Tehran without further escalating global energy costs.
U.S.-Iraq Pivot: Military Exit, Oil Partnership Entry
During an Oval Office meeting with Iraqi Prime Minister Ali al-Zaidi, President Trump confirmed that U.S. military forces will leave Iraq by September 30, 2026. The transition marks a structural pivot from a military alliance to an economic partnership, with Trump noting that "oil companies are all going in now" to form new partnerships with the Iraqi government.
Prime Minister al-Zaidi emphasized Iraq's need for a "fair share" of OPEC production, as the country aims to increase its capacity to 7 million barrels per day by 2030. The meeting solidified plans for American firms, including Chevron (CVX), to expand operations in Basra and other key energy fields, potentially positioning Iraq to operate outside traditional OPEC constraints.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.