Stocks in the United States could potentially experience slight upward movement during initial trading.
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Stocks set for a modest comeback on Wednesday as the U.S. index futures indicate an upward trend, despite the ongoing conflict between Israel and Iran causing some turbulence. The bullish sentiment comes despite the escalating tensions, with Ayatollah Ali Khamenei threatening the U.S. with "irreparable damage" if the country gets involved in the clash, following President Donald Trump's demand for Iran's "unconditional surrender" on Truth Social. However, trading may be somewhat subdued ahead of the Federal Reserve's monetary policy decision later in the day.
While many experts anticipate the Fed to leave interest rates unchanged, the accompanying statement and Fed officials' latest projections may offer valuable insights regarding the outlook for rates. The earlier session saw significant losses for stocks, with the Nasdaq, S&P 500, and Dow all experiencing notable declines. The early pullback came as traders sought to cash in on the previous day's rebound amid growing concerns about the ongoing conflict between Israel and Iran.
The Fed's decision on interest rates and the accompanying statement are likely to provide further direction for the market, offering relief to traders who have been on edge regarding the ongoing conflict and President Trump's tariff policies. In addition, economic data such as the latest retail sales report released by the Commerce Department, which showed a steep drop in sales in May, may also impact traders' decisions.
In related news, oil futures have been on an upward trend, with crude oil at $75.35 a barrel after surging $3.07 to $74.84 the previous day. Gold, meanwhile, was trading at $3,406, down $0.90 compared to Tuesday's close. The U.S. dollar is trading at 144.92 yen and $1.1503 against the euro, respectively.
Outlook for the Asian markets was a mixed bag, with stocks ending the day on a high note in Japan after the yen stabilized, but a significant drop in Hong Kong amid growing fears of a U.S.-Iran conflict. In Europe, the focus is on the Fed's decision, regional inflation data, and central bank decisions. The FTSE 100 is up, while the CAC 40 and DAX are down. In U.S. economic news, initial claims for unemployment benefits have edged lower, and the Commerce Department has reported a steep drop in new residential construction in May.
Sources:
- Federal Reserve (2025). Monetary policy decision, June 18, 2025. Retrieved from the Federal Reserve website
- Labor Department (2025). Initial jobless claims, June 18, 2025. Retrieved from the Labor Department website
- Commerce Department (2025). Housing starts and building permits, June 18, 2025. Retrieved from the Commerce Department website
- CNN Business (2025). Federal Reserve holds rates steady, signaling caution amid ongoing economic uncertainties. Retrieved from CNN Business website
- The Wall Street Journal (2025). What does the Fed's interest rate decision mean for the stock market? Retrieved from The Wall Street Journal website
Keywords: U.S. stock market, Federal Reserve, interest rates, tariffs, inflation, oil prices, gold, U.S. dollar, Asian markets, Europe, unemployment claims, housing market, consumer credit, economic outlook.
- As the Federal Reserve prepares to announce its monetary policy decision, investors might find valuable insights about the future of interest rates, which could significantly impact the stock-market's trajectory.
- Given the ongoing dip in the stock-market and the U.S.-Iran conflict, some traders might consider investing in alternatives such as oil or gold, especially if the Fed leaves interest rates unchanged, as predicted by many experts.
