Kevin Warsh was sworn in as the 17th chair of the Federal Reserve during a White House ceremony where President Donald Trump urged him to “just do your own thing”. Warsh takes the helm at a precarious moment for the US economy, as bond traders fully price in a rate hike this year and Fed Governor Christopher Waller warns that rising inflation could force the central bank to resume policy tightening.
The AI boom continues to create new titans, with South Korea’s SK Hynix and U.S. chipmaker Micron both surging past the $1 trillion market capitalization mark in today’s session.
Despite the AI rally pushing indices to fresh records, major institutions are urging caution, with Bank of America advising clients to prepare for a “summer correction” due to stretched technical indicators. Across the Atlantic, a top European Central Bank official echoed this sentiment, warning of elevated correction risks triggered by high market valuations, private credit vulnerabilities, and the ongoing conflict in Iran. Meanwhile, the Minneapolis Fed’s Neel Kashkari reaffirmed that defeating inflation remains the central bank’s priority, noting that persistently high prices could force tougher policy action while the labor market stays “in decent shape”. In the commodities space, U.S. crude oil fell below $90 following reports that an Iran framework agreement could restore traffic through the Strait of Hormuz within a month, helping drag the 10-year Treasury yield down to 4.465%.
The May jobs report obliterated expectations by adding 172,000 payrolls against an estimated 80,000, leaving the unemployment rate steady at 4.3% and virtually extinguishing hopes for a near-term Federal Reserve interest rate cut. This labor market resilience sent Treasury yields surging and prompted speculation on prediction markets that the Fed’s next move could actually be a rate hike.
The massive jobs print sent Treasury yields soaring, but the Dow Jones Industrial Average rallied to a fresh record high of 51,561 as investors rotated out of tech and into defensive sectors. Meanwhile, the Nasdaq Composite stumbled and chip stocks cratered following a disappointing earnings forecast from Broadcom, dragging down Asian tech heavyweights like Samsung and SK Hynix in a global semiconductor sell-off. In commodities, oil prices saw continued volatility as traders weighed potential U.S.-Iran ceasefire developments against Hezbollah’s rejection of the proposed terms. In the crypto space, Bitcoin capped a dismal week by dipping below $60,000, tumbling 50% from its all-time highs amid tech pressure and forced selling by MicroStrategy.
A blowout US jobs report adding 172,000 positions in May has revived bets that the Federal Reserve will raise interest rates in 2026, abruptly upending market expectations. The robust data arrives as the ongoing Iran war approaches the 100-day mark, continuing to stoke global inflation risks and disrupt supply chains. Adding to the geopolitical anxiety, American forces intercepted a fresh barrage of Iranian missiles and drones aimed at Kuwait and Bahrain in the Persian Gulf, underscoring the conflict’s continued threat to regional stability.
SpaceX made history with the largest initial public offering on record, raising $75 billion and valuing the rocket maker at nearly $1.77 trillion—a debut that officially crowned CEO Elon Musk as the world’s first trillionaire. The stock surged more than 20% in its Nasdaq debut, signaling massive investor appetite for Musk’s long-term visions of space exploration and orbital AI data centers.
Global equities surged and oil prices tumbled after President Donald Trump announced a framework peace agreement between the U.S. and Iran, which reportedly includes lifting oil sanctions and reopening the Strait of Hormuz within 30 days. U.S. crude futures fell 1.65% to $86.26 per barrel, while the S&P 500 rallied into positive territory for the week. In Asia, South Korea’s Kospi spiked 7% and Japan’s Nikkei 225 jumped 3.4% on the geopolitical optimism. Meanwhile, markets are preparing for next week’s Federal Reserve meeting under new “Chairman” Kevin Warsh, who is widely expected to hold interest rates steady but may implement a “regime change” by sharply reducing forward guidance and Fed speak. In the U.K., the economy unexpectedly shrank by 0.1% in April as skyrocketing fuel costs from the Iran war hammered services and consumer activity.
The U.S. and Iran have officially reached a peace agreement to end their nearly four-month war, triggering an immediate end to the U.S. naval blockade and the reopening of the crucial Strait of Hormuz.
Stock futures surged Sunday night in response to the U.S.-Iran peace deal, with Dow futures climbing 342 points (0.7%) and Nasdaq 100 futures popping 1.4%. The agreement sent oil markets tumbling, pushing U.S. crude down 4.8% to $80.80 per barrel and Brent lower by 3.9% to $83.89. This significant drop in energy prices could alter the inflation outlook just as the Federal Reserve heads into its Wednesday policy meeting—the first under the leadership of new Chair Kevin Warsh. Markets are currently pricing in a 98% probability that the Fed will leave interest rates unchanged as they await Warsh’s forward guidance regarding the recent supply shock and broader inflation trends.
The US and Iran have reached an interim peace agreement to halt their nearly four-month war and reopen the critical Strait of Hormuz, triggering a massive relief rally across global markets,. President Donald Trump, currently at the G7 summit in France, declared the waterway would be fully open by Friday and emphasized Iran’s commitment to halting its nuclear weapons program,. The diplomatic breakthrough sent oil plunging to a three-month low while US equities and Treasuries surged as investors scaled back bets on aggressive Federal Reserve interest-rate hikes,.
Federal Reserve Chair Kevin Warsh wrapped his debut policy meeting by holding interest rates steady at 3.5%-3.75%, but signaled a hawkish tilt that rattled bond markets. Warsh omitted a dot from the central bank’s closely watched “dot plot” and announced a task force to review the Fed’s $6.7 trillion balance sheet. The moves prompted a spike in short-dated Treasury yields and the dollar as traders moved to price in higher borrowing costs for 2026.
Kevin Warsh’s inaugural Federal Reserve meeting shocked markets as the new chairman omitted his rate forecast and the committee’s “dot plot” shifted to project an interest rate hike in 2026. The hawkish pivot stripped out prior easing language and triggered the S&P 500’s worst performance on a new Fed chair’s first meeting day since 1994.
The S&P 500 tumbled 1.21% and the Nasdaq Composite shed 1.34% following the Fed’s decision to hold its benchmark rate steady at 3.5%-3.75%. Ahead of the decision, MetLife’s Drew Matus outlined the high-stakes expectations for Warsh’s policy debut. The 2-year Treasury yield ultimately surged as high as 4.22% after the central bank delivered a drastically abbreviated, 130-word policy statement asserting it will “deliver price stability”. DoubleLine Capital CEO Jeffrey Gundlach noted that Warsh’s firm stance signals a definitive end to the “easy money” policy Wall Street had been counting on. Internationally, UK inflation held steady at 2.8% in May, while Japanese exports surged 17% on soaring semiconductor demand.
Federal Reserve Chairman Kevin Warsh shocked markets in his inaugural FOMC meeting with a staunchly hawkish tone on inflation, bringing forward expectations of a rate hike and sending the 2-year Treasury yield soaring to 4.22%.
The S&P 500 suffered its worst “Fed day” under a new chair since 1994 following Warsh’s firm commitment to price stability, though equities staged a partial rebound on Thursday. Mortgage rates jumped post-Fed in response to the tightening outlook as markets rapidly adjusted to the possibility of hikes rather than cuts. Meanwhile, an interim U.S.-Iran peace deal is set to reopen the Strait of Hormuz for 60 days, pushing international Brent crude futures down to $78.65 and U.S. gasoline prices back under $4 a gallon. Overseas, the Bank of England held its benchmark rate at 3.75% despite looming energy price hikes, while the Swiss National Bank kept rates at 0% and signaled readiness for FX intervention to cap a strengthening franc.