Markets Try to Recover Early After Fed Selloff

Published as of: June 18, 2026, 9:17 a.m. ET

(Editor's note: U.S. markets are closed Friday, June 19, in observance of the Juneteenth holiday. The Schwab Market Update will return on Monday, June 22.)

(Thursday market open) Equity indexes rose and yields were flat Thursday ahead of the open as investors recovered some of the ground lost after the Federal Reserve, in Kevin Warsh's first meeting as chair, indicated the possibility of a rate hike this year. Intel (INTC) was leading chip stocks higher early after President Trump said in a social media post the company would design and build chips stateside with Apple (AAPL).

Besides earnings from Micron (MU) and FedEx (FDX) next week, data picks up toward the end of the month with readings on first quarter GDP and May Personal Consumption Expenditures (PCE) prices. Components of last month's Producer Price Index (PPI) that map over to the May PCE price report—the Fed's favored inflation meter—suggest a firm print. Only the air transport component declined.

The Dow Jones Industrial Average lost more than 500 points Wednesday and the S&P 500 slumped 1.2% as hopes for a more dovish Fed were quickly dashed. All 11 of its sectors closed in the red. U.S. markets are closed tomorrow for Juneteenth. This could potentially mean choppy trading in the final hours of today's session, as options expire on what's traditionally called the quarterly "triple witching" day. If upside options momentum rolls off on expiration it could change dynamics and put a bit of a top into the market heading into the long weekend, but nothing is for sure.

1. Fed wrap: The Federal Reserve's first meeting with Warsh at the helm concluded yesterday with the central bank holding its benchmark overnight borrowing rate steady in the 3.5% to 3.75% range. The vote to hold was 12-0—unanimous, compared to the 8-4 dissent at April's meeting. While the hold itself was widely expected, notable was the central bank's shift to a more aggressive posture as inflation continues to hover above the Fed's 2% target. In its so-called dot plot, which tracks Fed officials' forecasts for future rate moves, nine of the 18 participating policymakers predict at least one rate hike by the end of 2026. (Warsh, a vocal critic of the dot plot as a communication tool, declined to add his prediction.) Consistent with Warsh's prior criticism of the Fed's overly communicative stance, the post-meeting statement totaled just 130 words. It described the U.S. economy as "expanding at a solid pace" and noted that "job gains have kept pace with the workforce." With regard to inflation, the FOMC vowed to "deliver price stability." Any mention of an easing bias was gone, signaling that Warsh, at least for now, is assuming a more hawkish stance. Stocks tumbled into the close and the S&P 500 suffered its worst "Fed day" under a new leader since 1994.
    
2. Foreign intrigue for bonds: A less-talked-about but still important report to watch today is April's Treasury International Capital (TIC) data, which provides a look at domestic and foreign investor demand for U.S. Treasuries. So far, flows haven't turned negative, but if they do, it could mean pressure on the Treasury market (and associated rising yields) as well as pain for stocks. Recent rate hikes by the European Central Bank (ECB) and the Bank of Japan (BoJ) pose risks that rising overseas rates might attract more investors into their domestic markets. Up to now, despite worries about possible lighter demand for U.S. assets, both the TIC data and the dollar haven't seen noticeable weakness, a sign that global investors have kept their appetite for these items.
    
3. Oil seen falling but normal flow far off: The expected signing of a peace deal is scheduled tomorrow when U.S. markets are closed for Juneteenth. This is key in reopening the Strait of Hormuz and allowing oil flow to eventually return to normal. Yesterday, the Trump administration released the 14-point memorandum of understanding between the two nations, but noted the deal is not final until tomorrow's signing in Switzerland. Still, crude oil futures trading shows U.S. prices are expected to fall from current levels near $80 per barrel to around $72 by the end of the year, though it's questionable how quickly trapped supplies can get where they were originally headed. Also, European and U.S. oil stockpiles are rather low and likely need refilling over the coming months. This extra demand could slow the expected decline in prices. "Even if the strait reopens on Friday as planned, it will take time before things return to normal," said Michael Townsend, managing director of legislative and regulatory affairs at Schwab. "It's likely to be months before things are back to the way they were before the war began in February."

• SpaceX (SPCX) suffered its first loss after going public last Friday, closing off nearly 5%. The slump is continuing in pre-market action.
   
• Other chipmakers rallied on the Intel-Apple news. Micron (MU) and Applied Materials (AMAT) tacked on more than 4% pre-market and Lam Research (LRCX) added more than 5%. Marvel Technology (MRVL) was additionally buoyed by news of a price-target hike from KeyBanc.
   
• Accenture (ACN) announced third-quarter earnings that topped estimates by $0.09 per share, while revenue was in line with expectations. The shares have plunged roughly 14%, however, on news that the company will invest nearly $4.2 billion in two acquisitions and one majority stake.
   
• Kroger (KR) is nearly 3% lower after falling short of expectations by a penny, though the grocer topped revenue estimates.
   
• Airline stocks, including United (UAL) and Delta (DAL) nosed higher on hopes for continued declines in fuel costs. Cruise lines such as Carnival (CCL) and Royal Caribbean (RCL) moved higher as well.
   
• Pfizer (PFE) retreated slightly on news that its CFO would be stepping down later this summer. 
   

Bonds on the run: Amidst all the hubbub around equities, it's easy to miss that bonds are priced attractively right now, notes my colleague Townsend in this week's edition of the WashingtonWise podcast.

Muni moment: While the second half of 2026 appears generally favorable on the municipal bond front, risks remain. Learn more in our mid-year outlook.

The percentage of S&P 500 stocks trading above their respective 50-day moving averages ($SPXA50R—candlesticks) settled Wednesday around 58%. This indicator of overall market strength has been recovering slowly off its late-March lows but has failed to see the 70% or even 80% levels reached early this year and last summer, respectively. Technically speaking, the indicator is hitting a lower high (blue trendline), but a solid move through the 65% level could be an encouraging sign for technically minded bulls.

Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.

June 19: U.S. markets closed for Juneteenth holiday.
June 22: No major earnings or data expected.
June 23: Expected earnings from Carnival (CCL) and FedEx (FDX).
June 24: May new home sales, Fed bank stress test results, and expected earnings from Micron (MU), Paychex (PAYX), and Jefferies Financial (JEF).
June 25: May PCE prices, Q1 GDP final estimate, May durable orders, and expected earnings from Darden Restaurants (DRI).