FEDThe FOMC under new chair Kevin Warsh held rates at 3.50–3.75% but removed forward-guidance language biased toward cuts and published a hawkish dot plot: the median end-2026 rate projection shifted to 3.8% from 3.4% in March, with nine of eighteen officials forecasting at least one 25bp hike and six projecting two hikes. The Fed also revised 2026 PCE inflation to 3.6% (from 2.7%) and trimmed GDP growth to 2.2%. Warsh announced five task forces to review monetary policy operations, communications, data sources, productivity and the labour market. The 2-year Treasury yield surged more than 16 basis points intraday to 4.216%, though by the close it had settled back to 4.05%.
MACROUS May retail sales rose 0.9% month-on-month, well above the 0.5% consensus, while May CPI came in at 4.2% year-on-year — the highest annual reading since April 2023. These data points underpinned the hawkish FOMC repricing and reinforce the Fed's upward inflation revision. Goldman Sachs Asset Management's Kay Haigh noted the Fed 'can just about avoid hikes, but the path is narrow,' reflecting market uncertainty about whether the ceasefire-related oil-price relief will be durable enough to ease price pressures.
EQUITIESWall Street fell sharply following the FOMC decision. The S&P 500 lost 1.21% to 7,420.10, the Nasdaq shed 1.34% to 26,021.66, and the Dow dropped 507 points (−0.98%) to 51,492.55. Large-cap tech led losses with Microsoft, Meta, Alphabet and Amazon all finishing lower. SpaceX (SPCX), which had rallied strongly since its IPO last week and briefly approached Microsoft in market capitalisation, reversed course to fall 5% as the hawkish Fed signal weighed on high-duration growth names.
ENERGYThe US-Iran ceasefire MOU — under which the Strait of Hormuz will reopen to commercial traffic, the US will lift its naval blockade, and fighting will pause for 60 days — initially sent WTI crude down more than 4.5% to around $80/bbl, its lowest since early March. However, President Trump's public comment that the US would 'go right back to dropping bombs' if the deal terms were unsatisfactory triggered a partial recovery; WTI settled at $76.79/bbl (+0.97%) and Brent at $79.55/bbl (+0.75%). Even after the drawdown, both benchmarks remain more than 20% above pre-war levels and over 40% above their start-of-year levels.
TECHDeutsche Bank upgraded Micron Technology to Buy with a new price target of $1,500 (from $1,000), implying approximately 47% upside, citing strength in memory chip pricing and sustained AI-driven demand. Earnings due today (Thursday 18 June) include Accenture (ACN) and Kroger (KR). US equity markets will be closed on Friday 19 June for the Juneteenth federal holiday, meaning the next US cash session is Monday 22 June.