Hawkish Fed meeting rattles markets

Markets reacted to 2 major storylines during the holiday-shortened trading week: a peace agreement and the Federal Reserve's first meeting under new Chair Kevin Warsh. Investors will watch for more key updates on the economy during the coming week.

Stocks
The market entered the week with a tailwind. On Monday, the US and Iran formally announced a peace deal that would reopen the Strait of Hormuz, triggering a broad risk-on rally. The Nasdaq surged 3.07% and the S&P 500 climbed 1.65%. Tech stocks led across the board, with some semiconductor names posting double-digit gains. The SpaceX () IPO, which debuted the prior Friday as the largest in history, also pushed higher, jumping nearly 20% for a second straight session. Tuesday brought a more complicated picture. Financial stocks rose, but the Nasdaq reversed sharply, dropping 1.15%, and the S&P 500 slipped 0.57%, weighed on by a steep selloff in semiconductor names. Housing data also took center stage, with May starts falling 15.4% to an annualized pace of 1.177 million, the weakest reading since May 2020. Wednesday was defined almost entirely by the Fed. In new Chair Kevin Warsh's first Fed meeting, interest rates were held steady as expected, but left the door open for at a rate hike later in 2026. Warsh's press conference added to the uncertainty, and markets sold off sharply in response. The S&P 500 fell roughly 1.4% and the Nasdaq shed about 1.5%. On Thursday, however, stocks managed to bounce going into the long weekend, recovering much of its Wednesday drop. Overall, electronic technology, producer manufacturing, and communications were among the top performers during the week, while commercial services, consumer non-durables, and energy minerals lagged.

Bonds
Bonds were front and center this week, with the Fed meeting serving as the primary catalyst. Heading into Wednesday, yields had been easing modestly as the Iran deal lowered some energy-driven inflation. The 10-year Treasury yield sat near 4.48% entering the week. However, Wednesday's Fed meeting resulted in volatility. The new Fed chair did not signal a definitive path forward regarding interest rates, sending yields surging, with the 2-year yield jumping 15 basis points and the 10-year pushing back toward 4.46%. The rate market, which had priced near-certain odds of a hold on interest rates, is now repricing the possibility of a hike later this year. The Produce Price Index (PPI) report released Wednesday morning added fuel to the fire, with headline wholesale prices climbing 1.1%, well above the 0.7% consensus.

Oil
Following Monday's announcement of a peace deal, oil prices fell across the board. WTI fell toward $75 per barrel by Wednesday, its lowest level since early March, sliding for 6 consecutive sessions as the market priced in a wave of new supply following the peace deal. Over 100 oil-carrying ships currently stuck in the Persian Gulf are expected to be released. The International Energy Agency added bearish pressure, warning of a looming global supply surplus and projecting that oil supply could rise by 8 million barrels per day in 2027, while demand grows by only 2 million. Overall, oil prices have now fallen nearly 40% from their conflict peak.

Gold 
Gold had a turbulent week as 2 major forces pulled in opposite directions. The Iran peace deal eased the geopolitical uncertainty that had supported the metal, initially pushing prices lower. However, gold later found a floor as the prospect of lower oil prices reduced inflation expectations, which in turn softened the case for aggressive Fed rate hikes. That recovery was then tested Wednesday when a hawkish-leaning Fed meeting sent yields sharply higher. The bearishness would follow through on Thursday into the holiday weekend. Overall, the metal remains well below its all-time high of $5,589 set in January, and investors continue to debate whether the Fed's inflation-fighting posture or easing geopolitical risk will be the dominant driver going forward.

Crypto 
Bitcoin spent the week largely range bound despite the macro noise. On Monday it benefitted modestly from the broader risk-on tone tied to the Iran deal. Then on Wednesday, it slipped, weighed down by the hawkish-leaning Fed reaction and a broader pullback in risk assets. Thursday brought a bigger drop, with prices falling below $62,300 at one point during the day. Altcoins followed in kind. Bitcoin is attempting to bounce after dropping below the $60,000 mark 2 weeks ago.

Source: Yahoo Finance, as of June 18, 2026.

KEY DATA FOR THE WEEK OF JUNE 22

Investors will watch for an update on GDP, as well as earnings from key semiconductor companies.

Source: Fidelity.com, as of June 18, 2026.