US stock indices closed lower on Wednesday following a two-day Federal Reserve meeting that concluded with the central bank holding its benchmark interest rate steady for a fourth consecutive time, in line with market expectations. The new Fed Chair, Kevin Warsh, used his inaugural FOMC press conference to outline a series of forthcoming reforms. The core message from Warsh's debut was a shift away from explicit policy guidance and pre-commitments on the interest rate path, with a greater focus on overhauling the Fed's institutional framework, data systems, and communication strategy. Concurrently, traders have fully priced in an interest rate increase from the Fed in October.
US Markets
At the close, the Dow Jones Industrial Average fell 507.12 points, or 0.98%, to 51,492.55. Earlier in the session, it had hit a fresh intraday record high, marking the third consecutive day of setting new highs. The Nasdaq Composite dropped 354.68 points, or 1.34%, to 26,021.65. The S&P 500 declined 91.25 points, or 1.21%, to 7,420.
SpaceX (SPCX.US) shares closed down 5%. NVIDIA Corp (NVDA.US) fell 1%, while Western Digital Corp (WDC.US) gained 4%. The Nasdaq Golden Dragon China Index ended the session 1.1% lower, with Li Auto Inc (LI.US) down 3%.
European Markets
Germany's DAX 30 index rose 38.22 points, or 0.15%, to 24,952.98. The UK's FTSE 100 added 14.02 points, or 0.13%, to 10,508.23. France's CAC 40 index fell 16.48 points, or 0.20%, to 8,430.79. The Euro Stoxx 50 gained 44.38 points, or 0.71%, to 6,301.80. Spain's IBEX 35 climbed 266.56 points, or 1.39%, to 19,430.16. Italy's FTSE MIB increased 187.94 points, or 0.36%, to 52,620.50.
Asian Markets
Japan's Nikkei 225 rose 0.72%. South Korea's KOSPI gained 1.58%. India's Sensex index advanced 0.45%.
Forex & Commodities
The US Dollar Index, which measures the greenback against six major currencies, rose 0.55% to settle at 100.091. In late New York trading, one euro bought $1.1539, down from $1.1610 the previous day. One pound sterling traded at $1.3338, down from $1.3429. The dollar bought 160.50 Japanese yen, up from 160.44. It also traded at 0.7971 Swiss francs, up from 0.7931; 1.4071 Canadian dollars, up from 1.3993; and 9.4610 Swedish kronor, up from 9.3618.
Cryptocurrencies
Bitcoin fell over 2% to $64,430.27. Ethereum declined 2.7% to $1,747.37.
Oil
WTI crude futures fell 0.35% to settle at $75.01 per barrel. Brent crude futures in London declined 0.34% to $78.69 per barrel.
Precious Metals
Spot gold fell 1.71% to $4,257.13 per ounce. Spot silver declined to $67.927 per ounce. Analysts monitoring gold prices believe the metal could still return to levels around $5,000 per ounce this year, but the $6,000 per ounce peak target discussed during last year's rally may now be out of reach. Rick Kanda of The Gold Bullion Company noted in a report, "I think the $6,000 forecast might be a bit of a stretch. But if central banks globally maintain their gold-buying momentum, gold has a good chance of reaching the $5,000 level." Kanda also pointed out that macroeconomic factors have changed, reducing gold's appeal as a safe-haven asset compared to last year.
Key Macroeconomic Developments
Rejecting Forward Guidance, Warsh Reshapes Fed Communication
The first press conference by Fed Chair Kevin Warsh concluded with him previewing a series of reform measures to be implemented at the central bank. A key change involves establishing multiple specialized task forces to explore more open data collection methods and study improvements to the Fed's existing statistical framework. During the conference, Warsh repeatedly emphasized he would not provide any forward guidance and avoided all questions regarding the future path of interest rates. Furthermore, he did not submit a personal interest rate forecast in the latest dot plot and stated he would not comment on any price movements in the markets during the press conference.
Fed Launches Reform: Warsh Proposes Five Task Forces to Reshape Central Bank Framework
New Fed Chair Kevin Warsh announced the launch of efforts to advance reforms at the central bank, including the creation of five new special task forces, during his first press conference in Washington. Warsh stated, "I will establish task forces in five areas closely related to monetary policy execution: first, the Federal Reserve's communication mechanisms; second, the Federal Reserve's balance sheet; third, the use of and reliance on existing data sources; fourth, productivity and employment issues in an era of transformation; and fifth, the Federal Reserve's inflation framework. These topics are of practical significance and important impact and, in my view, warrant a comprehensive review." He expressed the hope that most, if not all, task forces would complete their work by the end of this year. The teams are currently being assembled and are expected to be launched in the coming weeks, providing preliminary analytical frameworks in the fall. Warsh also noted that the task force on communication mechanisms is expected to ultimately propose "carefully considered adjustment recommendations," which may include modifications to the Fed's Summary of Economic Projections (SEP). The SEP contains the "dot plot," which displays the interest rate expectations of 19 senior officials. Warsh further pointed out that most private-sector executives use real-time information that requires little significant revision, whereas government data is frequently revised.
AI Industry Titans Gather at G7 Summit as US Seeks Global AI Standards Coordination
On Wednesday, during the G7 summit in France, the US President and senior administration officials reportedly met with chief executives of leading artificial intelligence companies to discuss a US-led effort to coordinate global AI standards. The report stated that the US Secretary of State, Treasury Secretary, Commerce Secretary, and other national leaders participated in a working lunch on AI and the digital age. Industry leaders attending the meeting included OpenAI's founder Sam Altman, Google DeepMind's CEO Demis Hassabis, Anthropic's CEO Dario Amodei, Meta's Scale AI founder and CEO Alexander Wang, and Mistral AI's CEO Arthur Mensch. Following the meeting, OpenAI's Global Affairs head, Anna Makanju, revealed that discussions included the possibility of establishing a global AI standards forum. She stated that "a real consensus is forming" between countries and AI labs to create a platform for democratic nations to collaborate and explore pathways for setting AI safety standards. Makanju said the US would lead this process, noting that "the ability to set standards is a way to ensure continued access to frontier models."
US Pending Home Sales Index Hits Six-Month High in May, Exceeding Expectations
Data from the National Association of Realtors on Wednesday showed that pending sales of existing US homes increased more than expected in May, although high mortgage rates and tight inventory continue to constrain the housing market. The Pending Home Sales Index, which measures contract signings, rose 3.8% in May to 76.8, its highest level since last November. As signed contracts typically take one to two months to become completed sales, this indicator is seen as a leading indicator for future home sales. Pending sales were up 4.8% year-over-year in May. Mortgage rates have risen alongside inflation and Treasury yields, pushed higher by oil prices amid the Iran war. Data from mortgage financier Freddie Mac shows that the 30-year fixed mortgage rate has risen more than 50 basis points since the conflict escalated in late February.
US Retail Sales Exceed Expectations in May, Supported by Tax Refunds and Stock Gains
US retail sales grew more than expected in May, although future momentum may slow as the support from large tax refunds offsetting price increases gradually wanes. The US Census Bureau reported Wednesday that retail sales rose 0.9% month-over-month in May, exceeding the market expectation of 0.5%. The sales increase in May partly reflected higher gasoline prices boosting sales at service stations. Gasoline prices had surged to their highest level in four years due to the Iran war. Prices have since retreated, with the national average retail gasoline price falling below $4 per gallon this week for the first time since April. Tax refunds and stock market gains supported consumer spending, with this consumption growth partly achieved by reducing savings. The savings rate fell to a four-year low in April. Core retail sales, which exclude automobiles, gasoline, building materials, and food services, increased 0.7% in May, following a 0.5% rise in April. Core retail sales most closely correspond to the consumer spending component of GDP. The tax filing season has ended, and a significant portion of refund money has been spent. Economists at PNC Financial stated that analysis of internal data shows "households are depleting their tax refunds faster than in previous years, with increased spending on gasoline being a primary reason for the difference."
Corporate News
US Awards $500 Million to SandboxAQ for New Chip Materials Search
The US government on Wednesday awarded $500 million to SandboxAQ to develop new chemicals and materials needed for domestic semiconductor manufacturing, including alternatives to PFAS (per- and polyfluoroalkyl substances). This funding is part of research and development funds allocated by the US President under the CHIPS Act. The program had previously provided $150 million for investment in new chip manufacturing equipment and $2 billion for the quantum computing field. Backed by NVIDIA Corp (NVDA.US), SandboxAQ was valued at $5.75 billion in April 2025 and has raised over $1 billion to date.
AST SpaceMobile's BlueBird Launch Fuels "Direct-to-Cell" Commercial Prospects
AST SpaceMobile Inc (ASTS.US), a leader in satellite internet technology focused on the "direct-to-cell phone broadband" sector, reported on Wednesday that its exclusive BlueBird 8, 9, and 10 satellites were successfully launched by a SpaceX Falcon 9 rocket and have successfully entered space orbit. AST SpaceMobile stated that the BlueBird satellites represent the largest commercial communications arrays ever deployed in low Earth orbit, with an area of approximately 2,400 square feet, intended for government, defense, and enterprise commercial use. BlueBird satellites have been manufactured and deployed up to BlueBird 37, with BlueBird 11, 12, and 13 satellites in final preparation for shipment to Cape Canaveral. "This first stacked launch is just the beginning," said the company's CEO, Abel Avellan. "BlueBird 11, 12, and 13 will be shipped out soon for our next launch, and next-generation BlueBird satellites up to BlueBird 37 are in active production and final assembly. Our focus is firmly on execution: scaling launch tempo, manufacturing scale, and preparing for commercial service."
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