Weekly Market Update (Jun 21, 2026)
HIGHLIGHTS
This was the first FOMC meeting under the new Fed chair. The Fed kept rates unchanged and removed its previous forward guidance.
- Fed: The Fed meeting was more hawkish than expected. Half of the 2026 dot plot shows rate hikes, and the new Fed chair emphasized prioritizing price stability. He also plans to discard forward guidance.
- Energy: Even a US-Iran peace deal is unlikely to fully ease inflation. It may support the short-term economic growth outlook.
- Japan: The Bank of Japan hiked its policy rate to 1%, implying concern about the risk of higher inflation and weaker economic growth. Markets expect the next hike in October, with rates rising to 1.5%.
MARKETS
| Nasdaq | 26,517.93 | +2.43% |
| S&P 500 | 7,500.58 | +0.93% |
| Dow | 51,564.70 | +0.71% |
| 10-Year | 4.45% | -4bps |
| Brent | 80.59 | -7.72% |
| DXY | 100.76 | +0.95% |
*Data as of market close. 5-day change ending on Friday.
VIEW FROM THE STREET
Equity
Morgan Stanley: The dispersion between high-performing stocks and the rest of the market is at its highest level since the COVID period. Equity performance has been concentrated in a small number of stocks.
Goldman Sachs: The capex boom is increasing the cost of capital, and we expect return dispersion to increase. It will also affect S&P 500 return on equity, as hyperscalers’ depreciation expenses are likely to rise, and they may turn to equity and debt financing to fund continued capex growth.
Fixed Income
UBS: New Fed Chair Warsh mentioned this week that the Fed’s bond holdings should be reduced. He believes that policy rate adjustments are more effective in influencing the economy, while balance sheet policy can only affect financial asset prices.
Morgan Stanley: Bond markets are showing disbelief in the productivity-driven disinflation narrative in the near term. Fed funds futures pricing reflects higher expectations of a rate hike in December.
Economy
UBS: Geopolitics remains the main driver of near-term volatility. Markets are still concerned about inflation and tighter monetary policy, especially as many major central banks have sent hawkish signals.
Standard Chartered: If there is a US-Iran interim deal to restart shipping through the Strait, it will help the global economy achieve a soft landing and lower long-term inflation expectations.