• 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}

• Markets jump on Iran deal to end war - Global equity and bond markets ended higher to start the week after the U.S. and Iran agreed over the weekend to a 60-day deal to reopen the Strait of Hormuz and halt the conflict. Both sides have confirmed the agreement, which is expected to be formally signed on June 19 in Switzerland. In response, oil prices fell sharply, down 4% and briefly dropped below $80 per barrel for the first time since March, helping provide relief to both equities and fixed income. Tech and small-caps led the gains, while the traditional defensive sectors and energy fell. Treasury yields and the dollar also declined, lending support to precious metals prices.
   
• Reduced geopolitical risk may support a broadening of leadership - The 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 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.

Angelo Kourkafas, CFA;
Investment Strategy 

^{Source for all data: Bloomberg}

• Stocks extend rally as hopes for a U.S.-Iran peace deal build – Equity markets rallied to close the week, with the U.S. and Iran both signaling progress toward a peace agreement. News reports suggest that a deal, which would enable a reopening of the Strait of Hormuz, could be signed on the sidelines of the G7 summit in France this weekend. In response, WTI oil prices fell to $84, near the lows seen after the outbreak of conflict in the Middle East, sparking strong gains in European and Asian equity markets. Major U.S. benchmarks were also higher, led by a 0.8% gain in the Russell 2000 index, while the technology-focused Nasdaq index lagged. This helped close a difficult week for stocks, particularly in the technology sector, on a more positive footing. Bond markets were a touch softer despite the dip in oil prices, but yields remain some way off the recent highs. The dollar lost ground against a basket of major currencies as risk sentiment improved.
   
• SpaceX shares jump after record breaking IPO – Shares of SpaceX surged in their first day of trading today following a record breaking $75 billion IPO that was more than four times oversubscribed by institutional and retail investors. The stock climbed as high as 31% above its offering price, before falling back later in the session to close around 18% up over the session. Trading over the day was brisk, with $64 billion worth of SpaceX stock trading over Friday, roughly double the next most actively traded stock, Micron Technology. The well-received SpaceX IPO will set the stage for large offerings from OpenAI and Anthropic potentially later this year. Buying into a newly public company can feel exciting, but we believe it is important for investors to revisit their investment goals and risk tolerance and let those guide their investment decisions. We discuss investing in IPOs in more detail in our recent Market Pulse Report: Don't Let Mega IPO Buzz Cloud Your Judgment.
   
• Fed in focus next week – Market sentiment into next week will be driven by the success, or not, of the latest round of U.S. - Iran peace talks, while we will also be watching the follow through of the SpaceX IPO. Otherwise, the Fed meeting will be the big event, with markets to watch signals from new Chair Warsh for indicators over how he will lead the FOMC in coming years. Pricing for interest-rate hikes has moderated in recent sessions, helped by a decline in oil prices, although short-term money markets still anticipate one 25 basis point (0.25%) increase in the fed funds rate by the start of 2027. Warsh is likely to tread a careful line on the policy outlook, in our view, signaling that that policy is effectively on hold, even if the Fed would be prepared to hike rates if needed. Recent communication from FOMC members suggest that this would be consistent with the view of the majority of the committee, although a few more hawkish members could signal a preference for rate hikes in their updated interest rate forecasts this month. We expect the Fed to stay on hold this year unless we see a longer and larger spike in oil prices, and indications that this inflation is broadening across a broader share of the consumer price index (CPI) basket.

James McCann;
Investment Strategy 

^{Source for all data: Bloomberg}

• Stocks rally on hopes for a U.S.-Iran peace deal – Equity markets rallied on Thursday, with the S&P 500 gaining 1.9% and the Nasdaq rising more than 2.5%, supported by comments from President Trump indicating that the U.S. and Iran have made progress toward a diplomatic resolution to the conflict. These reports followed earlier remarks from the President suggesting the U.S. could escalate military action with the aim of taking control of Iran’s oil infrastructure. On news of potential de-escalation, oil prices declined to around $87 per barrel while equities moved higher. Energy, real estate and consumer staples were the only S&P 500 sectors to finish lower, while cyclical sectors such as industrials and materials led to the upside. On the economic front, headline Producer Price Index (PPI) inflation rose 6.5% year-over-year in May—the highest annual reading since 2022—as elevated energy costs continued to push up headline inflation. Bond yields moved lower following the geopolitical developments, with the 10-year Treasury yield closing at 4.45% and the 2-year yield at 4.05%.
   
• Initial public offerings (IPOs): Three things to know – IPO activity is heating up, with SpaceX shares expected to begin trading on the secondary market tomorrow and reports suggesting strong institutional demand so far. In addition, AI companies OpenAI and Anthropic are also anticipated to go public later this year. While buying into a newly public company can feel exciting, we believe it is important for investors to revisit their goals and let those guide their investment decisions. Below are three key things to know about how IPOs have historically performed in their first year of trading and important considerations for investors. For a more detailed analysis, see our recent Market Pulse Report: Don't Let Mega IPO Buzz Cloud Your Judgment.
   

1. Excitement has historically faded quickly: Among the 30 largest IPOs in the Russell 3000 over the past 20 years, companies have, on average, gained more than 20% on their first day of trading relative to the IPO price (also known as the offer price set by underwriters). However, most individual investors are not allocated shares at the offer price, as those are typically reserved for institutional investors. Instead, retail investors generally buy shares in the secondary market once trading begins. Relative to the opening price in the secondary market, the average stock declined by 1.4% on its first day. While outcomes have varied widely, the average IPO also underperformed the S&P 500 by roughly 15% in its first year of trading.
    
2. Volatility has been elevated: IPOs have historically exhibited high volatility during their first year of trading. Within the same group of 30 companies, the average maximum drawdown (peak-to-trough decline) was 48% in year one.* Additionally, volatility—measured by the standard deviation of returns—has been considerably higher than our long-term expectations for the S&P 500.
    
3. Anchor back to your goals: IPOs often generate significant excitement and media attention. While some companies have delivered strong early gains, performance has varied meaningfully. On average, IPOs have underperformed the S&P 500 and experienced higher volatility in their first year. Against this backdrop, it is important to revisit your investment goals, time horizon, and risk tolerance, and to allow these factors to guide your decisions. We believe that maintaining a disciplined approach—rather than reacting to short-term sentiment—can help keep you aligned with your long-term goals.
    

• Producer price inflation rises in May – Higher energy prices continued to feed through to May’s Producer Price Index (PPI), with headline PPI rising 6.5% year-over-year—slightly above expectations for a 6.4% increase and marking the highest annual reading since November 2022. Energy was a key driver, with the energy sub-index climbing nearly 11% on a monthly basis and approximately 37% year-over-year. Looking beyond energy, underlying inflationary pressures remained evident. PPI excluding food and energy rose 0.4% in May and 4.9% on an annual basis. In our view, the uptick in inflation, combined with a rebound in job growth, is likely to keep the Fed on hold in the near term. That said, policymakers are likely to remove the easing bias from next week’s policy statement, in our view, reflecting increased upside risks to inflation. While rate hikes remain possible if the inflation outlook deteriorates further, we believe the bar for additional policy tightening is high—particularly after yesterday’s Consumer Price Index report suggested that inflationary pressures outside of energy remained relatively contained in May.

Brock Weimer, CFA;
Investment Strategy 

^{Source for all data not cited: FactSet. 
Source for all data cited: *FactSet, Morningstar Direct, Edward Jones.}