US-Iran Peace Deal Signed as Warsh's First Fed Meeting Delivers a Hawkish Surprise

Key Market Levels — Close Jun 18, 2026

• S&P 500: 7,500.58 (▲ 1.08%)
• Dow Jones: 51,564.70 (▲ 0.14%)
• Nasdaq: 26,517.93 (▲ 1.91%)
• STOXX 50: 6,318.65 (▲ 0.29%)
• FTSE 100: 10,399.70 (▼ 1.04%)
• Nikkei 225: 71,053.49 (▲ 1.65%)
• Gold: $4,136.05 (▼ 1.76%)
• Brent Oil: $79.56 (▼ 0.37%)
• WTI Oil: $76.48 (▼ 0.16%)
• EUR/USD: 1.1436 (▼ 0.19%)

US Market Update

The conflict that haunted markets all spring took a decisive turn toward resolution, and Wall Street marked the moment with a technology-led surge. Hours after President Trump signed an interim peace deal with Iran and supertankers began threading the reopened Strait of Hormuz, U.S. equities rallied on Thursday while crude prices slid to their lowest levels since before the conflict began. By the close the Nasdaq Composite had jumped 1.91% to 26,517.93 and the S&P 500 had added 1.08% to reclaim the 7,500 mark, settling at 7,500.58, while the Dow lagged with a slender 0.14% gain to 51,564.70 as energy names weighed on the blue-chip average. With U.S. markets closed Friday for the Juneteenth holiday, the advance capped a shortened but eventful week.

The celebration had to wait its turn, because the first half of the week belonged to the Federal Reserve. In Kevin Warsh's debut meeting as chair, the central bank held its policy rate steady at 3.50% to 3.75% in a unanimous vote, yet the accompanying projections delivered a distinctly hawkish jolt. Officials erased the lone rate cut that had lingered in the March outlook, with roughly half the committee now penciling in at least one hike before year end and the median path drifting higher. Stocks slipped close to 1% on Wednesday as those expectations sank in, the dollar climbed to a one-year high, and traders moved to price a materially higher probability of a hike before year end.

What turned the mood was the collapse in oil. Brent and West Texas Intermediate both sank to pre-conflict lows as the reopening of Hormuz promised to restore regional supply, draining the energy premium that had stoked inflation fears for months and handing equities a powerful tailwind into the close. The juxtaposition was the story of the week. An interim peace agreement and cheaper crude on one side, a Fed determined to keep its guard up on the other, leaving investors to welcome the de-escalation while bracing for a central bank in no mood to ease.

Corporate Earnings

An eclectic reporting slate this week, threading through electronics manufacturing, global consulting, grocery, used cars, academic publishing, and firearms. Six names offered a useful read on how different corners of the economy are faring.

• Jabil (JBL) — Beat estimates. Revenue of $8,751M topped the $8,661M estimate; EPS of $3.16 edged past the $3.12 estimate. AI infrastructure demand is powering the order book.
• Accenture (ACN) — Mixed results. Revenue of $18,718M came in just shy of the $18,748M estimate; EPS of $3.80 beat the $3.71 estimate on disciplined margins amid slower client spend.
• The Kroger Co. (KR) — Mixed results. Revenue of $46,121M beat the $45,529M estimate (+1.3%); EPS of $1.58 landed a penny below the $1.59 estimate as margin pressure trimmed profitability.
• CarMax (KMX) — Beat estimates. Revenue of $8,014M beat the $7,435M estimate (+6.2% YoY); EPS of $1.31 crushed the $0.98 estimate by 34.0%, though profit fell year over year as margins remained under pressure.
• John Wiley & Sons (WLY) — Mixed results. Revenue of $448M came in just under the $450M estimate; EPS of $1.67 topped the $1.65 estimate on research and AI content licensing growth.
• Smith & Wesson Brands (SWBI) — Beat estimates. Revenue of $178M sailed past the $155M estimate; EPS of $0.36 more than cleared the $0.23 estimate on stronger shipments and product mix.

Economic Indicators

The week's data carried a consistent message of an economy losing a little altitude even as inflation risks stayed elevated.

• Manufacturing — Factory readings disappointed. The June Empire State manufacturing gauge tumbled to 5.7 against a consensus near 14, and May industrial production crept up just 0.1%, both pointing to a manufacturing sector that has lost momentum heading into summer.
• Inflation — The inflation backdrop pulled the other way. Fresh Federal Reserve projections lifted the outlook for PCE inflation toward 3.6% for the year, underscoring how the energy shock from the conflict has lodged price pressures well above the 2% target even as the situation moves toward de-escalation.
• Labour Market — The labour market showed only the faintest softening. Weekly jobless claims eased back from the prior week's three-month high, yet the four-week average continued to drift upward, a gentle reminder that the pace of hiring is gradually cooling.
• Mortgage Rates — Borrowing costs offered a sliver of relief, with the 30-year fixed mortgage rate easing to a one-month low near 6.4% as the 10-year yield hovered around 4.45%, though affordability remained stretched and builder sentiment stayed weak.

Bonds and Monetary Policy

Treasuries whipsawed around the Fed. The 10-year yield backed up nearly five basis points on Wednesday as the hawkish projections landed, then reversed course on Thursday to settle near 4.44% as the peace agreement and tumbling oil revived hopes that the inflation impulse may eventually fade. A $39 billion auction of 10-year notes cleared at a high yield of 4.538% midweek, while the policy-sensitive two-year note edged up toward 4.20%.

The Fed's target range holds at 3.50%–3.75%, but the message from Warsh's first meeting was unmistakably firm. The committee lifted its forecasts for headline and core inflation sharply, projecting PCE inflation near 3.6% by year end, and the new chair repeatedly stressed an unambiguous commitment to restoring price stability while declining to telegraph the next move. Markets moved to price a materially higher probability of a hike by October, with at least one 2026 hike increasingly reflected in futures pricing, a striking shift for a central bank that began the year debating when to cut.

Policy and Sentiment

• US-Iran Peace Deal — The defining event was the signing of an interim peace deal between the United States and Iran to de-escalate the conflict and reopen the Strait of Hormuz. The first supertankers moved through the chokepoint within hours, though questions lingered over how quickly Iran would fully normalise flows and how durable the agreement would prove. The symbolism was nonetheless powerful enough to send oil to pre-conflict lows and lift risk appetite across global markets.
• The Warsh Fed — Chair Warsh used his first meeting to reshape how the Fed communicates, trimming the policy statement, stepping back from formal forward guidance, and announcing a series of reviews spanning the inflation framework, the balance sheet, and the projections themselves. Markets read the package as a credible signal that the new leadership intends to prioritise price stability over reassurance.
• The Dollar — The dollar strengthened to a one-year high as the hawkish Fed widened the rate gap with other major economies. A firmer greenback tightens financial conditions abroad and adds pressure on emerging market currencies, even as it helps blunt the cost of imported goods at home.

International Markets

Europe — STOXX 50: 6,318.65 (▲ 0.29%). European equities were mixed. The Euro STOXX 50 edged up 0.29% to 6,318.65, but the energy-heavy FTSE 100 slipped 1.04% to 10,399.70 as the slide in oil dragged on its large producers, a neat illustration of how the same headline can cut in opposite directions across regions.

Asia — Nikkei 225: 71,053.49 (▲ 1.65%). Japan was the standout. The Nikkei 225 surged 1.65% to 71,053.49, powered by a weak yen near 160 to the dollar and the global appetite for technology, even as Japanese officials voiced renewed unease over the currency's slide. Elsewhere in Asia, sentiment firmed on easing Middle East tensions and steadier energy costs.

Commodities. Oil was the week's clearest barometer of de-escalation. Brent settled around $79.56 and WTI near $76.48, both at their lowest since before the conflict, while gold fell to $4,136.05 as the return of risk appetite and a stronger dollar dimmed the appeal of bullion.

Commodities and Currencies

• Gold (Spot): $4,136.05 (▼ 1.76% daily)
• Brent Crude Oil: $79.56 (▼ 0.37% daily)
• WTI Crude Oil: $76.48 (▼ 0.16% daily)
• EUR/USD: 1.1436 (▼ 0.19% daily)
• GBP/USD: 1.3176 (▼ 0.22% daily)

Volatility and Week Ahead

CBOE Volatility Index (VIX): 16.40 — down 11.06% on Thursday as tensions eased (long-run average ~20).

Attention shifts from geopolitics back to the data and to the durability of the peace agreement. Investors will watch for confirmation that oil flows through Hormuz are normalising, parse a fresh round of Fed commentary for clues on the timing of a possible hike, and weigh whether the relief rally can broaden now that the conflict premium has eased. Thursday's Personal Income and Spending release, which includes core PCE, the Fed's preferred inflation gauge, is the week's most consequential data point and arrives alongside the third estimate of Q1 GDP. With the Fed leaning hawkish and inflation still warm, the path higher looks more selective than smooth.

Key releases:

• Mon 22 Jun — Canada: CPI (May)
• Tue 23 Jun — U.S.: Richmond Fed Manufacturing Index (Jun.)
• Wed 24 Jun — U.S.: Current Account (Q1); New Home Sales (May); Canada: BoC Summary of Deliberations
• Thu 25 Jun — U.S.: Personal Income and Spending incl. PCE (May); Durable Goods Orders (May); GDP (Q1 third estimate); Japan: Leading Indicators (Apr.)
• Fri 26 Jun — U.S.: Wholesale Inventories (May); U. of Michigan Consumer Sentiment (Jun. final)

For informational purposes only. Not investment advice. Data as of Jun 19, 2026. Consult primary sources before making investment decisions.

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