• Equities mixed at the start of the week – Sharp declines in technology stocks helped push the Nasdaq index 1.3% lower over the session and weighed on the S&P 500 index too. This continues the bumpy ride in AI stocks in recent weeks, but performance in other parts of the market was better, hinting at a potential rotation in market leadership, in our view. The Dow Jones Index moved higher to approach record highs, while the small-cap Russell 2000 index broke new ground, hitting a record close after a 0.8% gain today. In single stock news, SpaceX was down more than 10% following news of its plan to issue significant debt to finance AI investment. Otherwise, U.S. government bonds continued to struggle after last week's hawkish Fed meeting, with the 2-year U.S. Treasury note hitting a new 2026 high of 4.23% and longer-dated bonds selling off too. The rise in U.S. interest rates continues to support the dollar, which is trading at a 2026 high.
   
• Iran peace talks start in earnest – Newswires are reporting "major progress" between the U.S. and Iran as they kick start peace talks to address the issues unresolved in last week's interim two-month agreement. Headlines over the weekend highlighted ongoing tensions in the region, with Iran threatening to walk away from discussions in the face of Isreal's war in Lebanon, while President Trump warned of renewed military action. Hurdles to a durable peace agreement remain, but for the time being we are seeing tanker traffic through the reopened Strait of Hormuz pick up, even if this remains well below pre-war levels. Oil markets are trading lower today, with WTI oil at $75 per barrel, with the drop in crude prices, if sustained, to provide some helpful disinflationary relief for households in coming months, in our view.
   
• All eyes on the Fed – Lower oil prices will not show up in this week's May personal consumption expenditures (PCE) inflation report, which instead looks set to report another strong gain last month. Consensus forecasts look for a rise in headline PCE inflation of 4.1% in year-over-year terms, with the core measures seen at 3.4%. The spike in inflation, and easing concerns over the labor market, have spiked a hawkish turn in Fed communication, with around half of its interest-rate-setting committee signaling a hike this year. In response, markets are pricing a 0.5% increase in the fed funds rate over the next 12 months. We think interest rates are more likely to stay on hold, with lower oil prices to take some of the heat out of headline inflation in coming months, and core price growth seen cooling slightly too. However, the bar for a rate hike looks lower following the recent Fed pivot, and it would not take a significant disappointment on the inflation side to drive some modest tightening, in our view, as the central bank fine tunes policy to protect its credibility around its 2% inflation target.

James McCann;
Investment Strategy 

^{Source for all data: Bloomberg, FactSet}

There was no Daily Snapshot on Friday, June 19, 2026, in observance of the Juneteenth holiday.

• Equities rally on Middle East peace agreement – Stocks rebounded at the close a holiday shortened week after U.S. President Trump signed an interim peace deal with Iran, paving the way for a reopening of the Strait of Hormuz. The S&P 500 jumped 1.2% over the session, reversing much of yesterday's slide after a more hawkish than expected FOMC meeting, with the Nasdaq even stronger on news that Intel has struck a chipmaking deal with Apple. Despite a positive tone in markets, and WTI trading around recent lows of $77 per barrel, the front end of the U.S. government debt market remained under pressure. Yields on the 2-year Treasury note traded at 4.18%, just a shade off yesterday's 2026 high. However, longer-dated debt continues to perform better, with the 10-year Treasury yield rallying to 4.45% and the 30-year down to 4.9%, a three-month low. Finally, the shift higher in short-term U.S. rates markets continues to support the dollar, with this moving to a new 2026 high against a trade-weighted basket of currencies.
   
• Initial claims point to steady labor market – This morning's initial unemployment insurance claims data were broadly stable at low levels, with this closely followed measure of labor-market health telling us that firms are not cutting back on staff in concerning numbers at present. In our view, this solid labor-market backdrop helps explain yesterday's hawkish shift from the Fed. In the March Summary of Economic Projections, FOMC members were overwhelmingly warning that risks were tilted toward rising unemployment. At yesterday's meeting the signal was that risks in the labor market were broadly balanced. Meanwhile, almost every member continues to see risks to their inflation forecasts as tilted to the upside. This shift in the risk distribution helps explain why around half of the committee thought that an interest-rate hike this year might be needed.
   
• Lower incoming inflation? The good news for the Fed, in our view, is that some relief from inflation pressures is likely coming over the summer. Average national gasoline prices fell below $4 a gallon yesterday and should fall further in coming weeks if oil continues to trade in the $70-$80 per barrel range. This should likely quickly feed through to softer headline inflation readings. This trend will not be captured in next week's May PCE inflation report, which looks set to show another strong gain in price growth. However, we should see softer inflation in June CPI and PCE reports released around the middle of July. Otherwise on the data calendar next week, we will get a first look at business investment in May in the durable goods reports, consumer spending trends in the May personal income and spending data, and a more timely read on business sentiment in June PMI figures. Finally, we will be watching out for FOMC members commentary to better understand motivations for the hawkish shift at yesterday's meeting, especially given the more pared back guidance presented by Chair Warsh at the press conference.

James McCann;
Investment Strategy 

^{Source for all data: Bloomberg, FactSet}

• Markets close lower as Fed tilts more hawkish - Equity markets turned lower this afternoon following the conclusion of the Fed's June meeting. The Fed held rates steady and removed the projected 2026 rate cut from the dot plot, both of which were widely expected. However, the updated projections showed that several policymakers now see the possibility of a rate hike this year, though there was a roughly even split. Bond yields rose in response, with the move more pronounced at the front end of the curve, where yields tend to be more sensitive to monetary-policy expectations. The 10-year U.S. Treasury yield moved near 4.49%, while the 2-year yield rose more sharply to 4.21%. In energy markets, WTI oil prices rose modestly but remain in the mid-$70s after the recent decline tied to expectations for the Strait of Hormuz to reopen under the U.S.-Iran framework. Lower oil prices, if sustained, would likely help ease inflation concerns, though the situation remains fluid and could remain a source of volatility. Meanwhile, the U.S. dollar strengthened against major currencies but has remained broadly rangebound in recent trading.
   
• Fed holds rates steady but signals possible hike – The Fed's Open Market Committee (FOMC) concluded its first meeting under new Chair Kevin Warsh this afternoon, leaving the target range for the fed funds rate unchanged at 3.5%-3.75%. Because the hold was widely expected, markets focused on the updated economic projections, changes to the policy statement, and Kevin Warsh's tone in the press conference. The policy statement was shortened significantly and shifted toward a more inflation-focused message, removing the easing bias and forward guidance. The most important changes were in the Fed's projections. Policymakers raised their inflation forecast significantly, which likely drove the removal of the projected 2026 rate cut from the dot plot. However, the committee appears more divided on the path forward, with nine officials projecting at least one rate hike, eight expecting no change and one still projecting a cut. Notably, Chair Warsh did not submit a forecast. At the same time, they lowered their near-term growth outlook — though still above trend — and upgraded their assessment of the labor market. That said, the inflation outlook could become more balanced if the U.S.-Iran agreement leads to a durable resolution and oil prices remain lower. In our view, this still points to a prolonged pause as the most likely outcome. For markets, a “higher-for-longer” rate backdrop, rather than a renewed tightening cycle, can remain supportive of valuations, in our view, particularly if it reflects resilient economic growth and gradually moderating inflation.
   
• Retail-sales data reflects resilient consumer: Retail sales grew 0.9% in May from the prior month, above expectations for a 0.6% increase and stronger than the downwardly revised 0.4% rise in April. Higher gasoline prices contributed to the headline gain, with gas station sales rising 3.4% month-over-month. Gasoline prices have since retreated, with the national average dropping to roughly $4.00 per gallon from about $4.30 throughout May, which should help provide some relief to consumers if the decline persists. Importantly, the strength in the report was not limited to gasoline, as control-group sales — which feed more directly into GDP — also rose solidly. We believe the report points to a consumer that remains resilient, supported by a steady labor market and wage growth. A key takeaway, in our view, is that consumers continue to spend despite weak sentiment readings, which should be supportive of continued economic growth.

Brian Therien, CFA;
Investment Strategy 

^{Source for all data: FactSet}

• Markets close mixed - U.S. equities were mixed on Tuesday, with the Dow Jones higher by about 0.6%, while the S&P 500 and Nasdaq were lower, indicating some broadening of returns beyond technology and growth-oriented names. Market performance is being driven by investor focus on the start of the Federal Reserve’s policy meeting alongside building hope around the U.S.–Iran ceasefire, with falling oil prices helping provide a supportive backdrop. Treasury yields are edging lower ahead of the Fed decision, reflecting a repricing around the outlook for inflation and interest rates. Overall, markets continue to navigate a transition from geopolitical-driven volatility toward policy-driven direction, with resilient economic data reinforcing a higher-for-longer rate backdrop, in our view. Looking ahead, easing geopolitical tensions and a stable economic foundation could support further broader market participation, though near-term performance will likely be driven by Fed guidance and the path of inflation.
   
• Reduced geopolitical risk may support a broadening of leadership – An agreement to reopen the Strait of Hormuz should help contain oil prices and normalize energy flows, although shipping activity will likely take time to return to pre-war levels. The deal aligns with expectations that had been signaled for several days, suggesting much of the news may already have been priced in, with markets now trading above pre-conflict levels. However, the rally since the March market low has been narrow, led predominantly by technology. We believe easing geopolitical tensions could help alleviate inflation pressures and help reduce bond yields, potentially driving a rotation into cyclical sectors and previously lagging areas of the market. As a result, we favor a broadening of leadership, including cyclicals, U.S. mid-caps, and equal-weight exposure. While the U.S. economy continues to show the strongest momentum, lower oil prices are likely to provide relief for energy-sensitive regions, with international developed value stocks likely to benefit most, in our view.
   
• Fed in focus this holiday-shortened week - Beyond geopolitics, the next key catalyst for markets comes Wednesday, when the Federal Reserve, led by new Chair Kevin Warsh, is set to announce its policy decision and release updated projections for rates, growth and inflation. Following recent improvements in employment data and signs of accelerating inflation, we expect the Fed to remove its easing bias from both the policy statement and the 2026 median dot, which previously indicated one rate cut this year. Updated projections are likely to reflect higher inflation, lower unemployment, and no cuts in 2026. That said, if the Iran agreement leads to a durable resolution, the associated decline in oil prices suggests inflation may have peaked this quarter and could ease over the remainder of the year. In this context, a prolonged pause appears to be the most likely outcome, in our view. For markets, a “higher-for-longer” rate backdrop, rather than a renewed tightening cycle, can remain supportive of valuations, in our view, particularly if it reflects resilient economic growth alongside gradually moderating inflation pressures.

Mona Mahajan;
Investment Strategy 

^{Source for all data: Bloomberg}