Markets
Stocks rose over the shortened trading week as investors digested developments in the Middle East, while the Fed held short-term rates steady.
The Standard & Poor’s 500 Index rose 0.93 percent through Thursday’s close, while the Nasdaq Composite Index gained 2.43 percent. The Dow Jones Industrial Average climbed 0.71 percent. The MSCI EAFE Index, which tracks developed overseas stock markets, advanced 0.96 percent over the same four-day period.¹ ²
It Was a Volatile Week
The week began with stocks rising and oil prices falling after the White House announced that the U.S. and Iran had reached an agreement over the weekend.
All three major averages climbed on Monday, posting gains ranging from 1 to 3 percent, while crude oil prices declined by roughly 5 percent.³
Tuesday was a split-screen performance. The Dow Jones Industrial Average rose to a record intraday high as oil prices fell, while the S&P 500 and Nasdaq slipped as investors rotated out of technology stocks and into cyclical sectors such as banks and industrials. The Dow crossed the 52,000 threshold for the first time.⁴
The S&P 500 and Nasdaq opened higher midweek as technology stocks recovered, and news showed that consumer spending unexpectedly rose in May. Investors also appeared to be in a risk-on mood as they awaited the Fed’s decision, confident that the Federal Open Market Committee (FOMC) would hold rates steady.⁵
Then, on Thursday, stocks rebounded, led by chipmakers and the AI trade. The S&P 500 capped its 11th winning week out of the past 12.⁶
Inflation Update
As expected, the Fed held rates steady at its June meeting, keeping the federal funds rate in a target range of 3.50 to 3.75 percent.
This was the first FOMC meeting with newly appointed Fed Chair Kevin Warsh. The Fed acknowledged the uptick in inflation this year, and Warsh reemphasized the Fed’s goal of maintaining a 2 percent inflation rate during the post-meeting press conference.⁷
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