Wall Street Climbs Ahead of Fed Rate Decision
Wall Street's major indices had closed lower on Friday following a series of airstrikes between Israel and Iran, which rattled markets.
Quick overview
- U.S. stock indices rose on June 16, with the S&P 500 up 1.1%, the Dow Jones gaining 1%, and the Nasdaq increasing by 1.6%.
- Investors are focused on the Federal Reserve's upcoming interest rate decision, with expectations for two rate cuts before December.
- Global central banks, including the Bank of Japan and the Bank of England, are set to announce their policy decisions this week.
- Geopolitical tensions from the Israel-Iran conflict have influenced market movements, leading to a rise in defense stocks.
U.S. stock indices surged on Monday, June 16, as investors weighed the latest escalation in the conflict between Israel and Iran while turning their attention to the Federal Reserve’s interest rate decision due Wednesday.
The S&P 500 rose 1.1% to 6,044.09 points, the Dow Jones gained 1% to 42,602.49, and the Nasdaq jumped 1.6% to 19,715.95.
Markets continue to price in two rate cuts before December, with the first move most likely in September. While the Fed is widely expected to keep its target range steady at 4.25%–4.50% this week, attention will be focused on the updated “dot plot” and economic projections to gauge policymakers’ outlook for the remainder of the year.
Last time, the median forecast pointed to two rate cuts in 2024. However, some analysts now anticipate that projection could shift to just one cut, given persistent inflation and a resilient labor market.
Investors will also be watching for any signals on whether the Fed might pivot toward easing later this year, or if trade-related uncertainty from the Trump administration will keep the central bank on hold.
Central Bank Decisions in Europe and Asia
This week will be busy across global central banks. The Bank of Japan is expected to maintain its policy stance on Tuesday, with the Bank of England and Norway’s Norges Bank also set to announce decisions later in the week.
Sweden’s Riksbank is likely to cut rates, while the Swiss National Bank may return to negative rates amid ongoing franc strength.
In the U.S., Tuesday’s retail sales report will be closely watched for signs of economic momentum. A pullback in auto sales could weigh on the headline figure, even if core sales improve. Weekly jobless claims will be released on Wednesday due to the U.S. market holiday on Thursday.
Wall Street’s major indices had closed lower on Friday following a series of airstrikes between Israel and Iran, which rattled markets. Defense stocks climbed in response to the heightened geopolitical tensions.
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