Powell holds rates, defies pressure 20/06/2025

HOT stories for today

US market wrap:

• Markets braced for the long-anticipated decision from the Federal Open Market Committee (FOMC) — and it delivered just that: interest rates held steady at 4.25%–4.5%, in line with widespread expectations. The lack of surprise initially gave equities a modest boost, with the S&P 500 climbing briefly on policy clarity. But that optimism quickly faded as investors digested the broader message: no near-term rate cuts, and an outlook clouded by geopolitical risk. 
• Wednesday’s session on Wall Street was a tale of two moods. Stocks opened flat, cautiously higher ahead of the Fed statement, then rallied post-announcement as investors welcomed the absence of hawkish surprises. However, the rally lost steam into the close. The Nasdaq lagged, dragged down by mega-cap tech names, while energy stocks gained as oil prices rose in tandem with Middle East tensions. By Thursday, a report suggesting a potential U.S. military strike on Iran over the weekend rattled global sentiment. Asian and European markets slipped, while oil futures surged, reflecting rising geopolitical risk and the potential for supply disruptions.

Powell holds rates, defies pressure

• Federal Reserve Chair Jerome Powell held firm on interest rates Wednesday, leaving the federal funds rate unchanged at 4.25%–4.5%, and sending a clear message: the Fed won’t be swayed by political pressure. Despite repeated calls from former President Donald Trump and Vice President J.D. Vance for immediate rate cuts, Powell signaled that inflation remains too sticky, and that the Fed will stay its course until data justifies a pivot.
• In a subtle but firm rebuke, Powell also addressed Trump’s tariff policies, warning that "someone has to pay"—a nod to the inflationary cost of trade restrictions. The bond market appeared to support the Fed’s stance, with 10-year Treasury yields rising to 4.39%, suggesting investor confidence in Powell’s patient, data-driven approach. While Powell avoided political confrontation, his tone during the post-meeting press conference made it clear: monetary policy won’t be dictated by the campaign trail. The takeaway? The Fed remains committed to its dual mandate—even if that means politely defying the White House.

Stocks on the move:

• Steel Stocks — Nucor (NUE) rose over 3% after the steelmaker issued optimistic second-quarter earnings guidance, projecting $2.55 to $2.65 per share, beating FactSet’s $2.36 estimate.
• Affirm (AFRM) — The consumer finance firm climbed 3% following the announcement of a new loan sale facility with Prudential’s (PRU) PGIM Fixed Income division. Under the agreement, Prudential may purchase up to $500 million in Affirm loans at a time, with a total commitment of $3 billion over the next three years.
• Sunrun (RUN) — Shares rebounded 5% despite an RBC downgrade from outperform to sector perform. The move follows Sunrun’s worst single-day drop ever on Tuesday amid a broader solar sell-off. Peers also rallied, with Enphase Energy (ENPH) up nearly 5%, and SolarEdge (SEDG) gaining 7%.
• Oracle (ORCL) — The enterprise software giant added more than 1% after Guggenheim raised its price target to the highest on Wall Street. Analyst John DiFucci said Oracle stands “on the precipice of a narrative shift” driven by decades of technology innovation.

                                           Watchlist: ACN, KR, DRI, KMX, ORCL, RBLX, META, AFRM



Today’s action

• Asia-Pacific markets ended mostly higher Friday as investors digested fresh economic data from China and kept a close eye on mounting tensions between Israel and Iran. The People’s Bank of China left its key lending rates unchanged, with the 1-year loan prime rate held at 3.0% and the 5-year LPR steady at 3.5%, in line with expectations. Hong Kong’s Hang Seng Index gained 1.15%, while China’s CSI 300 inched up 0.24%. In Japan, the Nikkei 225 added 0.12%, but the broader Topix slipped 0.17% in volatile trading. 
• In the U.S., stock futures were lower ahead of Friday’s session, as investors remained on edge over the possibility of U.S. military involvement in the Middle East conflict. Dow futures declined 104 points (–0.24%), while Nasdaq 100 and S&P 500 futures dipped 0.17% and 0.18%, respectively. U.S. markets were closed Thursday in observance of Juneteenth. For the week, the S&P 500 is up 0.07%, the Dow is down 0.06%, and the Nasdaq has climbed around 1%. On the economic calendar, traders are watching the Philadelphia Fed’s manufacturing survey and the Conference Board’s leading economic indicators for May, both due Friday morning.

Bitcoin

• Bitcoin remained flat around $104,000 on Friday, showing little movement as the Israel–Iran conflict entered its second week. While stocks and altcoins showed modest gains, BTC failed to break out of its narrow range, weighed down by global risk aversion. Meanwhile, Circle and Coinbase (COIN) rallied after the U.S. Senate passed the bipartisan GENIUS stablecoin bill, signaling growing regulatory clarity.
• Ethereum and XRP also saw small gains, while Solana traded slightly higher. In Iran, hackers linked to the pro-Israeli group Predatory Sparrow reportedly stole $100 million from top exchange Nobitex, causing temporary internet outages and adding tension to an already fragile digital market. Despite the uncertainty, institutional interest in crypto remains strong, with over $87 billion in Bitcoin now held by public companies.
  Watchlist: Bitcoin: 100,000-112,000, Ethereum: 1500- 2800, Solana: 80-183

Forex

• The euro extended its rally for a third straight session on Friday, with EUR/USD trading near 1.1520 in early Asia. The pair is buoyed by a weaker U.S. Dollar, potentially due to a technical pullback, though rising geopolitical tensions could soon revive safe-haven flows into the greenback. Heightened concerns over potential U.S. military action against Iran—following Senate remarks that President Trump will give Tehran a final warning on its nuclear program—remain a key risk driver.
• Meanwhile, the Japanese Yen (JPY) firmed modestly, supported by stronger-than-expected CPI data, which showed annual inflation still above the BoJ’s 2% target. This reinforced expectations of a future rate hike by the Bank of Japan, while the JPY also benefited from its traditional safe-haven status amid escalating conflict risk. The USD/JPY pair edged lower but remained close to monthly highs as risk sentiment stayed fragile.
  Watchlist: EUR/USD: 1.0700-1.1650, USD/JPY: 140-151

Basic Materials

• Gold (XAU/USD) came under renewed selling pressure during Friday’s Asian session, falling to a one-week low near $3,344, even as the broader risk tone weakened. The decline comes despite a softer U.S. Dollar, as traders react to the Federal Reserve’s hawkish outlook, signaling persistent inflation risks and a slower path to rate cuts—undermining demand for the non-yielding metal.
• Meanwhile, West Texas Intermediate (WTI) crude eased to around $73.25, trimming earlier gains. While fears of deeper U.S. involvement in the Israel–Iran conflict continue to provide a floor for oil prices, traders digested news that Donald Trump may decide within two weeks whether to launch a strike on Iran, according to Bloomberg. The threat of expanded conflict remains a key wildcard for both energy and safe-haven assets.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-75.80
  
   

Key Economic Events Today:

EST time
08:30 am: USD Philly FED Manufacturing Index
10:00 am: USD CB Leading Index


Earnings

BMO (Before the US Market opens)
ACN          Accenture Plc.
KR             Kroger Company
DRI            Darden Restaurants
KMX          CarMax Inc
AMC (After the US Market closes): Enjoy the weekend!

The TEFS Analyst team wishes you a successful day!