The week of June 16–20 was defined, above all, by a central bank inflection. In his first post-meeting press conference as Federal Reserve Chair, Kevin Warsh delivered what markets swiftly labelled a "hawkish hold" — rates were left unchanged at 3.50–3.75%, but the updated projections shifted the narrative decisively toward tightening. Against that backdrop, equities proved surprisingly resilient, oil fell sharply on improving Middle East diplomacy, and the dollar strengthened across the board.

Equities

U.S. equities absorbed Wednesday's initial post-Fed sell-off and finished the week modestly higher. The S&P 500 gained approximately 0.9% — its eleventh winning week in twelve — settling around 7,500. The Nasdaq outperformed, helped by a recovery in semiconductor stocks, which led the rebound on Wednesday and Thursday. Both U.S. markets were closed on Friday for the Juneteenth holiday. In Europe, the STOXX Europe 600 added 0.6% over four sessions through Thursday. Germany's DAX rose more than 1.5% and France's CAC 40 gained around 1.4%, with both benefiting from firm eurozone activity readings. Asian markets diverged. Japan's Nikkei 225 climbed 1.4%, briefly crossing the 71,000 mark for the first time, supported by continued yen weakness that favors exporters. The Hang Seng fell more than 3%, weighed by geopolitical uncertainty and a holiday-shortened trading week, and MSCI Emerging Markets declined close to 3%, pressured by the dollar's renewed strength.

Rates & Credit

The Fed's June meeting set the tone for fixed income. Nine of the 18 FOMC participants now project at least one rate hike before year-end, pushing the median 2026 rate forecast up to 3.8% from 3.4% in March. Officials also raised their inflation forecasts, to 3.6% for headline and 3.3% for core PCE. The 10-year U.S. Treasury yield ended the week around 4.46%; the 10-year German Bund yield rose to approximately 2.99%. French OAT spreads over Bunds held broadly stable. Investment-grade credit absorbed the hawkish surprise in reasonable order, while high-yield spreads widened modestly before recovering into week-end.

Foreign Exchange

Dollar strength was the dominant FX theme. EUR/USD retreated to approximately 1.1469, its lowest level in several weeks, while GBP/USD settled near 1.3428. USD/JPY held above 160, underscoring the persistent divergence between the Bank of Japan's cautious normalization path and the Fed's more aggressive posture. In emerging markets, the hawkish repricing weighed broadly on EM currencies, with the Mexican peso and Brazilian real among the more visible losers.

Commodities & Gold

Oil was the week's most dramatic mover. Brent crude fell approximately 8.5% to settle near $80 per barrel, with WTI close behind at around $77, as an interim U.S.–Iran peace agreement eased concerns over Strait of Hormuz shipping disruptions. Gold fell to around $4,150 per ounce, its third consecutive weekly drop, pulled lower by the stronger dollar and the hawkish repricing of U.S. rates. Copper remained relatively firm, supported by tight physical supply conditions.

The Week Ahead

Attention turns to inflation and activity data. June flash PMI readings on Tuesday will offer a first read on whether momentum is fading heading into summer. The more critical event will be Thursday's May PCE and core PCE release — the Fed's preferred inflation measure — whose outcome will shape market expectations around whether the next move in rates is truly a hike. Investors will also monitor geopolitical developments in the Middle East, and watch for commentary from Federal Reserve officials who may seek to calibrate the message from last week's meeting.