MARKET SNAPSHOT
Stocks turned lower as the Federal Reserve continued to hold rates steady while signaling that a rate increase may be ahead. Treasurys sold off, sending yields higher. Gold settled higher but gave up gains on the Fed decision, and the dollar strengthened. Oil settled higher.
MARKET WRAPS
EQUITIES
Federal Reserve officials hinted more strongly at the potential for higher interest rates, sending stocks lower and bond yields higher.
The central bank held its benchmark rate steady, as expected, in Kevin Warsh's first meeting as Fed chariman. After the meeting, Warsh held a 42-minute press conference, fielding a range of questions about his priorities.
In his remarks, Warsh was adamant that the central bank needs to deliver on its 2% inflation target-an emphasis that investors took as a sign, along with the Fed's new rate projections, that it might soon raise interest rates.
Stock indexes fell after the Fed decision, with the S&P 500 down 1.2%, the Nasdaq 1.3% lower and the Dow industrials off 1%. Losses deepened during Warsh's remarks.
On the Fed itself, Warsh said that he is setting up a task force to tackle topics such as communications, the balance sheet, data sources, productivity and jobs, and inflation. He also confirmed that he was the official who didn't submit an economic projection to the Fed's so-called dot plot.
It's a "new chapter for the central bank," Warsh said.
Earlier Wednesday, Asian equities were mixed.
Japan's Nikkei Stock Average rose 0.7% while South Korea's Kospi added 1.6% to close at another record high, with both indexes benefiting from a rally in AI-related stocks. Memory chip maker SK Hynix gained 5.8%.
China's benchmark Shanghai Composite climbed 0.4%, the Shenzhen Composite gained 0.7% and the ChiNext Price Index ended 1.6% higher. Hong Kong's Hang Seng index was 0.8% lower as discretionary consumer stocks fell.
In Australia, the S&P/ASX 200 Benchmark Index added 0.5%, while New Zealand's S&P/NZX 50 Index dropped 0.2%.
COMMODITIES
Oil futures settled modestly higher in an up-and-down session.
President Trump's warning that the U.S. could resume attacks if Iran doesn't stick to the deal was countered by the possibility of a quick reopening of the Strait of Hormuz.
News that the signing of the memorandum of understanding could be brought forward came "just after it was looking like we might have a little bit of a bullish retracement on our hands," Robert Yawger of Mizuho said. "The big question hanging over the market heading into Friday's (or maybe today's) signing of the MOU is how many barrels of oil are going to make it out of the Persian Gulf and how fast."
WTI settled up 1% at $76.79 a barrel and Brent rose 0.7% to $79.55 a barrel, both snapping a four-session losing streak.
Front-month gold settled 0.6% higher but gave up gains as the Federal Reserve holds interest rates steady while numerous officials see the possibility of a rate increase this year.
"Gold is currently caught between opposing forces," Antonio Di Giacomo of XS.com said.
While declining geopolitical risks and falling oil prices reduce the immediate need for safe-haven assets and reinforce expectations of lower inflation, uncertainty surrounding Fed policy, pending negotiations between the U.S. and Iran, and persistent global economic risks "continue to provide support for the precious metal," Di Giacomo said.
Silver rose 1.1%.
TODAY'S TOP HEADLINES
Fed Holds Rates Steady, But More Officials See Higher Rates as Next Move
Federal Reserve officials signaled Wednesday that their next move may be to raise interest rates, not cut them, a striking reversal at Kevin Warsh's first meeting as chairman and a sign of how sharply the inflation outlook has turned.
The Fed held its benchmark rate steady, in a range of 3.5% to 3.75%, in a unanimous vote. But officials' quarterly economic projections told the story of the shift: Nine of 19 officials penciled in at least one rate increase by year's end, up from none in March. Just one foresaw a cut, down from 12.
Trump Defends Iran Deal, Says He Wants to Avoid 'Economic Catastrophe'
ÉVIAN-LES-BAINS, France-President Trump on Wednesday defended his agreement to end the Iran war, saying he wanted to avoid an "economic catastrophe" that could have resulted if the conflict the U.S. launched had continued.
Trump said he was influenced by the stock market's rise as he worked toward a resolution of the conflict. He said he didn't want to be compared with former President Herbert Hoover, who was president during the 1929 market crash that led to the Great Depression.
"He was always the one I didn't want to be," Trump told reporters at the Hôtel Royal where he and other world leaders gathered for the Group of Seven meeting. "I didn't want to see an economic catastrophe."
U.S. Retailers' Sales Growth Accelerated Last Month
Sales growth rose more than expected for U.S. retailers in May, as consumers continued to make purchases even as gasoline prices remained elevated.
Retailers' sales grew by 0.9% last month to $763.7 billion, versus the 0.4% growth recorded in April, the Commerce Department said Wednesday. The May numbers were higher than analysts' expectations.
Retail sales numbers are recorded in nominal terms and account for the total number of dollars spent. As consumers spend more on higher gasoline prices, total sales could rise even if the volume of goods remains the same. May data from the Labor Department showed gasoline prices rising at a faster pace than in April.
The IPO Onslaught Is Forcing Bankers to Pick Teams
SpaceX had practically every banker on Wall Street at its beck and call for its blockbuster IPO last week. That won't be the case for OpenAI and Anthropic.
The two artificial-intelligence giants are preparing for what could be dueling initial public offerings this fall, and the same two banks, Goldman Sachs and Morgan Stanley, are expected to play major roles in both. But not the same individual bankers.
Instead, both banks are forming distinct teams to ensure no information is shared between the rivals, people familiar with the matter said. Banks are typically very careful about avoiding the appearance of conflicts for all deals, from IPOs to mergers and acquisitions.
ECB's Tracker Continues to Point to Slower Wage Growth
Eurozone wage growth shows no sign of picking up in response to the rise in energy prices that has accompanied the conflict in the Middle East, according to figures released Wednesday by the European Central Bank.
A tracker of pay deals negotiated by labor unions and similar groups of workers indicates that wages are set to rise by 2.6% this year, having increased by 3% in 2025. The 2026 figure is unchanged from earlier estimates.
The tracker followed the release of figures Tuesday that showed the growth of total labor costs-including wages and taxes-slowed in the first three months of the year.
Trump Says Anthropic Negotiations Continue as AI Leaders Huddle at G-7
ÉVIAN-LES-BAINS, France-President Trump said negotiations with Anthropic over restoring access to the company's latest artificial-intelligence models were "going fine," comments that came at a Group of Seven summit where some world leaders were concerned about losing access to leading AI tools.
After a lunch with world leaders and AI executives including Anthropic's Dario Amodei, Trump and Commerce Secretary Howard Lutnick told reporters that talks between the two sides are continuing nearly a week after they started. Trump said the broader AI meeting went well and touted how much investment AI is driving in the U.S.
"We had a great meeting with AI. We had all the top people here and it was a great meeting," Trump said. "And, as you know, we're building tremendous numbers of plants, but AI we're building the biggest, the biggest in the world."
DOJ Defends Musk's xAI in Data-Center Pollution Lawsuit
The Justice Department moved to block an NAACP lawsuit challenging xAI over allegations that gas turbines powering its Mississippi data center risk polluting nearby communities.
The lawsuit filed by the civil-rights group said xAI, Elon Musk's artificial-intelligence company, and its subsidiary MZX Tech are violating the Clean Air Act by operating gas turbines without an air permit at a data center in Southaven, Miss.
The DOJ said in its filing this week that the data center "trains and develops new AI models that are critical to the economy and the Department of War." The department asked the U.S. District Court for the Northern District of Mississippi to dismiss the lawsuit.
Expected Major Events for Thursday
01:30/AUS: May Foreign Exchange Transactions and Holdings of Official Reserve Assets
06:30/INA: Jun Bank Indonesia Board of Governors meeting and decision
06:30/PHI: Philippine Monetary Policy meeting and decision
08:00/TAI: Taiwan Monetary Policy Decision
08:20/TAI: May Money Supply
09:59/CHN: May FDI Foreign Direct Investment
21:00/SKA: May PPI
22:45/NZ: May Overseas Merchandise Trade
23:30/JPN: May CPI (Nation), CPI ex-food (Nation)
All times in GMT. Powered by Onclusive and Dow Jones.
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(END) Dow Jones Newswires
June 17, 2026 16:37 ET (20:37 GMT)
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