Most major U.S. stock indexes closed the holiday-shortened week higher, with sentiment broadly supported by news that the U.S. and Iran had signed a memorandum of understanding, clearing the path toward reopening the Strait of Hormuz and helping push oil prices lower (worst week in 2 months). Of the major US equities indexes, the Nasdaq Composite performed best, advancing 2.4%, followed by the Russell 2000 and S&P 500, which added 1.2% and 0.9%, respectively. U.S. markets were closed on Friday in observance of the Juneteenth holiday. The Federal Reserve left the federal funds rate target range unchanged at 3.50% to 3.75% on Wednesday, as widely expected. However, the central bank’s updated Summary of Economic Projections and Chair Kevin Warsh’s first post-meeting press conference were largely interpreted as leaning hawkish, triggering a sell-off in stocks and a rise in short-term Treasury yields on Wednesday afternoon. Short-term US Treasury yields rose amid shifting Fed policy expectations while the yield curve flattened and the dollar strengthened. European stocks gained as investors were generally encouraged by the news that the U.S. and Iran had reached an agreement. Japan’s stock markets surged in the week, with the Nikkei 225 Index hitting a new all-time high as BoJ raised short-term policy rate to 1%, its highest level since 1995. Gold ended the week unchanged despite a sharp decline on Wednesday & Thursday. Bitcoin was weak, ignoring tech stocks rebound.
Have a great weekend
Charles & Syz Research Lab