The deal landed overnight.
Apple has agreed to work with Intel to design and manufacture chips in the United States using Intel's most advanced 18A process technology. Intel surged roughly 9% in premarket trading Thursday morning. Apple edged up about half a percent.
What matters
- Apple chose Intel's 18A process node for domestic chip manufacturing, the first major foundry partnership between the companies since Apple dropped Intel silicon in 2020
- The U.S. and Iran digitally signed a memorandum of understanding overnight to end hostilities and reopen the Strait of Hormuz, sending oil toward a three-month low
- Futures are pointing sharply higher after yesterday's 1.2% selloff on the hawkish dot plot
This is the customer Intel's foundry business needed.
For six years Intel has poured billions into a foundry transformation that Wall Street mostly treated as speculative. CEO Lip-Bu Tan drew investment from Nvidia and the U.S. government, secured CHIPS Act subsidies, and pushed the 18A process node into production. The node began manufacturing earlier this week, a milestone that came ahead of schedule. But the question that mattered most was never about technology. It was about demand.
Apple is the answer.
Apple spends tens of billions annually on advanced chips, nearly all of it with Taiwan Semiconductor. TSMC has been stretched thin servicing simultaneous demand from Nvidia, AMD, and the hyperscalers building out AI infrastructure. Apple diversifying even a portion of that spend into Intel's domestic fabs does two things at once. It gives Intel the revenue to justify the capital already deployed. And it gives Apple a second source for its most critical component, reducing the concentration risk that comes with routing everything through Taiwan.
The partnership also carries a supply chain dimension that neither company needs to spell out. Domestic chip manufacturing reduces cross-strait exposure at a time when that risk sits near the top of every corporate planning agenda.
Intel fell 8.5% yesterday in the broader chip selloff that followed the Fed's hawkish projections. This morning's premarket move more than reverses that session. The deal gives Intel's turnaround something it lacked: a named, tier-one foundry customer with a decade of procurement needs ahead.
The Iran signing resets the oil math
The U.S. and Iran digitally signed a memorandum of understanding overnight. A formal ceremony is set for Friday at Bürgenstock, Switzerland. Under the terms, Iran allows 60 days of safe commercial passage through the Strait while the U.S. lifts sanctions and begins withdrawing its naval blockade. Iran reaffirmed it will not develop nuclear weapons.
Oil is in the mid-$70s, roughly $15 below the level that pushed headline CPI to 4.2% last month. If crude holds here through the next measurement window, the energy component that drove the inflation scare reverses in July's data.
On June 12 we argued the peace deal was premature and the energy pullback was a window, not an exit. The deal signed faster than the skeptics expected. The IEA has since flagged a potential supply surplus. The risk premium that powered the energy trade through May is unwinding.
The dot plot is 18 hours old and already getting repriced
Yesterday the Fed held at 3.50% to 3.75%. Nine of 18 officials now project at least one hike this year. The median year-end rate forecast jumped to 3.8% from 3.4% in March. Chair Warsh withheld his own dot, killed forward guidance, and announced five task forces to review the Fed's operations. We covered the full breakdown last night.
The S&P 500 fell 1.2% to 7,420. The Dow dropped 507 points to 51,493. The two-year yield spiked 16 basis points to 4.22%, a one-year high.
This morning both catalysts are pulling the other way. The Intel deal reasserts tech leadership. The Iran signing removes one of the inflation inputs the Fed just cited. Nine officials projected hikes based on data that included oil near $85. Crude is now $10 lower.
From the earnings calendar
Accenture reported Q3 revenue of $18.72 billion, up 6%, and guided full-year revenue growth to 3% to 4% in local currency. AI consulting demand drove the beat. Kroger posted identical-store sales growth of 1.0% and adjusted earnings of $1.58 per share, with eCommerce up 19%.
Gold is near $4,300 after falling roughly 2% yesterday on the hawkish projections. The Iran signing pulls two directions at once: easing the geopolitical bid while lowering the inflation inputs that supported hike expectations.
Futures are pointing sharply higher. The Nasdaq 100 is leading. Markets are closed Friday for Juneteenth, so today's session carries the weight of a three-day weekend with the Bürgenstock ceremony happening while trading is dark.
