Morning Brew June 18 2026

Good morning.

After yesterday’s hawkish Fed decision, the probability of a rate hike  by December has risen to around 85%. As expected, the Fed left rates unchanged, but 9 of 19 officials now see at least one hike this year, up from none in March. Kevin Warsh also scrapped traditional forward guidance while pledging to restore price stability. The key takeaway is clear: Warsh is not following Trump’s calls for lower rates, but rather the data.

After yesterday’s sharp risk-off move following higher rate expectations, progress in the Middle East is helping risk sentiment recover this morning.

US equities fell sharply on Wednesday after the hawkish Fed pivot. The S&P 500 dropped 1.2% to 7,420.10, closing near session lows, while the Nasdaq 100 shed 1.0% and the Dow Jones fell 1.0%. Every S&P 500 sector closed lower, led by communication services. Microsoft fell 3.8% and was the largest drag on the index; Carvana tumbled 10.3%; CarMax dropped around 7% after same-store sales disappointed for a fourth straight quarter; and Adobe slid 5.3% to its lowest level in more than eight years. On the upside, semiconductor names rebounded, with Broadcom, Micron, and Applied Materials among the top S&P 500 gainers. Jabil surged as much as 14% after beating Q3 estimates and raising full-year guidance. In after-hours trading, Rumble edged up around 3.9% after announcing a restructuring into two core business units.Space X had the first negative day. 

European equities closed at fresh record highs on Wednesday ahead of the Fed decision, with the Stoxx 600 rising 0.5% to 639.31 and the Euro Stoxx 50 gaining 0.68% to a new record close of 6,300.07. The DAX edged up 0.1% to 24,934.67, the FTSE 100 added 0.1% to 10,508.61, and the SMI rose 0.4%. Banking stocks gained for a fifth straight session, reaching a new high since 2008. The standout mover was BMW, which slumped 8.3% to a 2020 low after cutting its profitability forecast on worsening demand in China, dragging Volkswagen and Mercedes-Benz lower as well.

The USD Index surged above 100 and is currently at 100.24. EUR/USD is at 1.1520, GBP/USD at 1.3311, and USD/JPY at 160.60.

Gold is at 4,313 and silver at 69. Silver traded in a massive range yesterday, from 71.50 to 66.50, and is again trading around its 200-day moving average.

Oil is lower on more constructive news from the Middle East. The US and Iran released the text of an interim agreement, while President Donald Trump threatened to resume attacks and target Iranian officials if they fail to honour their commitments. Trump is struggling to present the agreement as a win and to appear in control of a situation where he clearly is not. In my view, the highest risk factor at the moment is a possible lashing out.

The U.S. and Iran released the text of an interim agreement their presidents have signed to end their war on Wednesday, with U.S. President Donald Trump threatening to resume attacks and kill Iranian officials if they failed to honor their commitments. The text of the agreement is below. It is not yet clear if there will be a ceremonial signing in Switzerland.

Key events today are the Swiss National Bank at 9:30 where no action is expected SNB-Entscheid: Schlegel belässt den Leitzins wohl bei 0 % – das sind die Folgen - 20 Minuten

The Bank of England is also to hold rates, but the unity of the decision will be the crucial item.

Thursday, June 18, 2026
U.S. Initial Jobless Claims, Philadelphia Fed Manufacturing Survey, Swiss National Bank rate decision, Bank of England rate decision

Friday, June 19, 2026
Japan CPI, UK Retail Sales