All eyes on Fed’s next move 18/06/2025

HOT stories for today

US market wrap:

• Amid escalating tensions between Israel and Iran, Wall Street closed in the red on Tuesday, with all major indexes retreating. The Dow Jones Industrial Average dipped 0.70%, the S&P 500 fell 0.84%, and the tech-heavy Nasdaq Composite declined by 0.91%. Soaring oil prices—up more than 4%—added to the market’s downward pressure as geopolitical uncertainty rattled investors.
•  Investor sentiment was further dampened by a fiery statement from former President Donald Trump, who used his Truth Social platform to issue a stern warning to Iran’s leadership, declaring, “our patience is wearing thin” and demanding “UNCONDITIONAL SURRENDER!” NBC News reported that Trump is actively considering military options, according to both current and former U.S. officials. Despite the broader selloff, the energy sector emerged as the sole bright spot, buoyed by surging crude prices. Meanwhile, tech giant Apple acted as a drag on the S&P 500, contributing to the index’s overall weakness.

All eyes on Fed’s next move

• As the Federal Reserve wraps up its two-day policy meeting on Wednesday, investors are betting that rates will remain unchanged—holding steady at 4.25% to 4.5%. But the real action isn’t in the rate decision; it’s in the Fed’s updated outlook. Markets are laser-focused on the new “dot plot”, the central bank’s internal forecast of where rates are heading next. Earlier this year, Fed officials signaled two rate cuts in 2025. That guidance may now be pared back to just one—or possibly none—as inflation remains sticky, driven by rising oil prices and renewed tariff threats.
• The backdrop of global tension, including conflict in the Middle East, is also complicating the path forward. Despite inflationary headwinds, the U.S. job market remains relatively stable. Unemployment sits around 4.2%, though monthly job gains are slowing, suggesting a labor market that’s cooling—but not collapsing. Markets are still pricing in a potential rate cut in September, with a second move by year-end hanging in the balance. All eyes will be on Fed Chair Jerome Powell’s press conference Wednesday afternoon for any clues on how the central bank plans to navigate a landscape clouded by inflation, geopolitical risk, and political uncertainty heading into the 2025 election cycle.

Stocks on the move:

• Jabil (JBL) – Shares of the electronics manufacturer and Apple supplier surged nearly 9% after the company raised its full-year forecast, now projecting core earnings of $9.33 per share on $29 billion in revenue. Jabil also topped Wall Street estimates for both earnings and revenue in its fiscal third quarter.
• Energy Stocks – Crude oil futures rallied amid intensifying tensions between Israel and Iran, fueling gains across the energy sector. The S&P 500 energy index rose 1%, driven by a 2.9% climb in Valero Energy (VLO). Other notable movers included Chevron (CVX), Hess (HES), and APA Corporation (APA), all of which advanced more than 1%.
• Verve Therapeutics (VERV) – The gene-editing biotech soared 81% after announcing it will be acquired by Eli Lilly (LLY) for $10.50 per share, a 68% premium over its previous close. The $1.3 billion deal is slated to close in the third quarter. Shares of Eli Lilly dropped 2% following the news.
• Solar Stocks – The sector took a sharp hit after the Senate’s draft of President Donald Trump’s tax legislation included plans to gradually phase out renewable energy subsidies. Enphase Energy (ENPH) plunged approximately 24%, while First Solar (FSLR) and Sunrun (RUN) tumbled 18% and 40%, respectively.

                                              Watchlist: FSLR, META, MSFT, AAPL, COIN, NVDA, MU



Today’s action

• Markets across the Asia-Pacific region saw mixed performance on Wednesday, as geopolitical tensions between Israel and Iran continued to cloud investor sentiment. Japan’s Nikkei 225 gained 0.47%, with the Topix up 0.4%. In South Korea, the Kospi climbed 0.7%, while the Kosdaq rose 0.66%. Japanese export data came in slightly better than expected—May exports declined 1.7% year over year, beating Reuters’ forecast for a 3.8% drop. Meanwhile, Hong Kong’s Hang Seng Index fell 0.87%, underperforming regional peers.
• In the U.S., stock futures edged higher early Wednesday as traders awaited the Federal Reserve’s policy decision and press conference, both due this afternoon. S&P 500 futures rose 0.14%, while Nasdaq 100 futures ticked up 0.18%. Futures tied to the Dow Jones Industrial Average added 24 points, or 0.06%. Key economic data is also on deck, including May housing starts, building permits, and weekly jobless claims—all offering insight into the health of the U.S. economy. Markets will be closed Thursday in observance of Juneteenth.

Bitcoin

• As tensions escalate between Israel and Iran, Bitcoin (BTC) has held firm around $105,500, underscoring its resilience during geopolitical shocks. Historically, BTC has weathered conflict periods with minimal disruption, bolstered by long-term adoption and institutional backing. That institutional momentum is gaining pace. BBVA is advising wealthy clients to allocate 3–7% to Bitcoin and Ethereum, while MicroStrategy (MSTR) just raised $1 billion to buy another 10,100 BTC, pushing its total to over 592,000 coins. 
• Meanwhile, Chinese mining firms are relocating production to the U.S. to avoid tariffs, and the Senate has advanced the GENIUS Act, signaling progress on stablecoin regulation. Crypto markets remain steady, with altcoins like XRP gaining traction and Tron’s Justin Sun preparing a Nasdaq listing via reverse merger, as the space deepens ties with traditional finance.
  Watchlist: Bitcoin: 100 000-112 000, Ethereum:1500-2800, Solana: 80-183

Forex

• The Japanese Yen (JPY) edged higher Wednesday, rebounding from monthly lows as the U.S. Dollar (USD) eased ahead of the Federal Reserve’s rate decision. While safe-haven flows support the Yen amid geopolitical tensions, reduced expectations for a Bank of Japan rate hike in 2025 may limit gains.
• The EUR/USD pair also climbed near 1.1500, supported by hawkish ECB bets and soft U.S. economic data. However, Israel-Iran tensions could curb further upside. Markets now await the Fed’s statement and updated rate projections, which could set the tone for global currencies heading into the second half of the year.
  Watchlist: EUR/USD: 1.0700-1.1650, USD/JPY: 140-151

Basic Materials

• Gold (XAU/USD) remained in consolidation mode for a second straight session Wednesday, hovering below the $3,400 level as traders stayed cautious ahead of the Federal Reserve’s policy decision.  Geopolitical tensions and trade uncertainties continue to underpin gold’s safe-haven appeal, but the metal’s non-yielding nature has kept bulls in check ahead of the crucial FOMC meeting later today.
• Meanwhile, West Texas Intermediate (WTI) crude extended its rally, trading near $73.55 in the Asian session. Oil prices are being buoyed by escalating Israel-Iran conflict risks and a sharper-than-expected 10.13 million-barrel drop in U.S. crude inventories, according to API data. Heightened fears of U.S. involvement in the Middle East are further supporting the bid in energy markets.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-73.80
  
   

Key Economic Events Today:

EST time
08:30 am: USD Unemployment Claims
08:30 am: USD Housing starts, Building permits
10:30 am: USD Crude Oil Inventories
02:00 pm: USD Federal Funds Rate
02:30 pm: USD FOMC Press Conference



Earnings

BMO (Before the US Market opens)
KFY          Korn Ferry
GMS         GMS Inc.
AMC (After the US Market closes): SWBI, GRRR

The TEFS Analyst team wishes you a successful day!