June S&P 500 E-Mini futures (ESM25) are up +0.20%, and June Nasdaq 100 E-Mini futures (NQM25) are up +0.33% this morning, pointing to a slightly higher open on Wall Street after yesterday’s drop, while investors await the Federal Reserve’s policy decision and updated projections, as well as Chair Jerome Powell’s remarks.

Investors also await updates on whether the U.S. plans to become directly involved in the conflict in the Middle East. The conflict between Israel and Iran entered a sixth day on Wednesday, showing no signs of easing. Reuters reported that U.S. President Donald Trump and his team were weighing several options, including joining Israel in strikes against Iranian nuclear facilities. President Trump demanded Iran’s unconditional surrender on Tuesday and threatened a potential strike against the country’s leader. Iran’s Supreme Leader rejected President Trump’s demand for unconditional surrender in a statement read by a television presenter on Wednesday, warning that U.S. military action would have “serious and irreparable consequences.”

In yesterday’s trading session, Wall Street’s main stock indexes closed lower. Solar stocks cratered after Senate Republicans outlined revisions to President Trump’s tax-and-spending bill that would phase out solar, wind, and energy tax credits by 2028, with Sunrun (RUN) plummeting over -40%, and Enphase Energy (ENPH) tumbling more than -23% to lead losers in the S&P 500. Also, Lennar (LEN) slumped over -4% after the homebuilder posted weaker-than-expected FQ2 adjusted EPS. In addition, T-Mobile US (TMUS) slid over -4% after Bloomberg reported that shareholder SoftBank Group sold 21.5 million shares of the wireless network operator to finance its AI initiatives. On the bullish side, Jabil Circuit (JBL) climbed more than +8% and was the top percentage gainer on the S&P 500 after the supplier of electronic parts posted upbeat FQ3 results and raised its full-year revenue guidance.

Economic data released on Tuesday showed that U.S. retail sales slumped -0.9% m/m in May, weaker than expectations of -0.5% m/m, while core retail sales, which exclude motor vehicles and parts, unexpectedly fell -0.3% m/m, weaker than expectations of +0.2% m/m. Also, U.S. May industrial production fell -0.2% m/m, weaker than expectations of no change m/m, while manufacturing production rose +0.1% m/m, in line with expectations. In addition, the U.S. import price index was unchanged m/m in May, stronger than expectations of -0.2% m/m.

“Investors should still expect some volatility in economic data due to lingering effects of trade policy. The economy and the consumer are holding up for now, but there are signs of vulnerability. That could present risks in the second half of the year — particularly if we see a further slowdown in jobs or spending,” said Bret Kenwell at eToro.

Today, all eyes are focused on the Federal Reserve’s monetary policy decision later in the day. The Federal Open Market Committee is widely expected to keep the Fed funds rate unchanged in a range of 4.25% to 4.50%. Market watchers will follow Chair Jerome Powell’s post-policy meeting press conference for hints on what could ultimately prompt the central bank to make a move on interest rates and when that might happen. The Fed’s quarterly “dot plot” in its Summary of Economic Projections, which shows FOMC members’ forecasts regarding the path of interest rates, will also be closely watched. Economists expect the Fed’s rate forecasts to remain largely unchanged – two cuts this year, followed by additional policy rate reductions in 2026.

A survey conducted by 22V Research showed that the current tariff environment would lead to 25 basis points of cuts this year. “Investors believe that if the dot plot stays at two cuts, it will be because the inflation forecast doesn’t move up,” said Dennis DeBusschere, founder of 22V.

On the economic data front, investors will focus on U.S. Initial Jobless Claims data, which is set to be released in a couple of hours. Economists expect this figure to be 246K, compared to last week’s number of 248K.

U.S. Building Permits (preliminary) and Housing Starts data will also be reported today. Economists forecast May Building Permits at 1.420M and Housing Starts at 1.350M, compared to the prior figures of 1.422M and 1.361M, respectively.

U.S. Crude Oil Inventories data will be released today as well. Economists foresee this figure standing at -2.300M, compared to last week’s value of -3.644M.

Meanwhile, the U.S. stock markets will be closed tomorrow in observance of the Juneteenth federal holiday. The markets will reopen on Friday.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.385%, down -0.11%.

The Euro Stoxx 50 Index is down -0.02% this morning as investors digest regional inflation data and look ahead to the Fed’s interest rate decision. Investors also continued to monitor the conflict between Israel and Iran, which entered its sixth day, with concerns intensifying about more direct U.S. involvement in the conflict. Healthcare stocks lost ground on Wednesday, while defense and bank stocks outperformed. Final data from Eurostat confirmed on Wednesday that the Eurozone’s annual inflation rate eased to 1.9% in May from 2.2% in April, falling below the European Central Bank’s target for the first time since September 2024. Separately, data showed that U.K. inflation eased slightly in May but remained well above the Bank of England’s target, making it unlikely to influence BOE rate setters. Meanwhile, Sweden’s central bank lowered its key policy rate by 25 basis points to 2.00% on Wednesday and noted there was a slight possibility of additional easing later this year if economic weakness continues and inflation declines further. Investor focus now turns to the BOE’s monetary policy decision on Thursday, with the central bank widely expected to leave its key interest rate unchanged at 4.25%. In corporate news, Airbus SE (AIR.P.DX) rose over +2% after the planemaker lifted the upper end of its dividend payout target ahead of a business update.

European Central Bank Governing Council member Fabio Panetta said on Wednesday that the central bank would maintain a flexible approach to monetary policy decisions amid a backdrop where the conflict between Israel and Iran adds to the risks posed by Washington’s trade policy.

U.K.’s CPI, U.K.’s Core CPI, Eurozone’s CPI, and Eurozone’s Core CPI data were released today.

U.K. May CPI has been reported at +0.2% m/m and +3.4% y/y, compared to expectations of +0.2% m/m and +3.3% y/y.

U.K. May Core CPI came in at +0.2% m/m and +3.5% y/y, in line with expectations.

Eurozone May CPI arrived at unchanged m/m and +1.9% y/y, in line with expectations.

Eurozone May Core CPI stood at unchanged m/m and +2.3% y/y, in line with expectations.

Asian stock markets today closed in the green. China’s Shanghai Composite Index (SHCOMP) closed up +0.04%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.90%.

China’s Shanghai Composite Index closed just above the flatline today as investors were underwhelmed by the opening of the annual Lujiazui Forum, which offered few new policy signals. Sentiment also remained cautious as Israel and Iran exchanged new missile strikes, extending their conflict into a sixth consecutive day. Technology stocks advanced on Wednesday after China’s securities regulator unveiled plans to establish a new segment on Shanghai’s tech-focused STAR market aimed at hosting pre-profit growth firms and supporting innovation. The watchdog also said that China will promote the development of science and technology bonds to foster innovation. Also, Li Yunze, the head of China’s financial regulator, said that China’s financial opening and expanding consumer market benefit the nation and provide improved asset allocation opportunities for global investors. Meanwhile, the country’s foreign exchange regulator pledged to maintain stability in the yuan exchange rate and guard against external shocks and risks. With few policy surprises emerging from the forum, investors now turn their attention to the upcoming July Politburo meeting for clearer guidance on economic support. In other news, state media Securities Times reported on Wednesday that China will distribute the remainder of its consumer goods trade-in funds in an orderly manner, and the central government is currently directing local governments to utilize the funds at a steady pace. In corporate news, Li Auto slid over -4% in Hong Kong after Chinese media reported that Meituan founder Wang Xing, a major shareholder in the EV maker, further reduced his stake in the company.

Japan’s Nikkei 225 Stock Index closed higher today, hitting its highest level in four months. Video game and brokerage stocks led the gains on Wednesday. However, the benchmark index’s gains were limited by geopolitical tensions, as investors grew increasingly concerned about the prospect of a more direct U.S. military involvement in the Middle East. Meanwhile, investors also digested a slew of weak economic data from the country that reinforced expectations that the impact of U.S. President Trump’s tariffs could limit the Bank of Japan’s ability to raise rates. Data from the Ministry of Finance released on Wednesday showed that Japan’s exports fell in May for the first time in eight months as major automakers like Toyota were impacted by sweeping U.S. tariffs. Also, Japan’s imports dropped in May at the sharpest pace since January 2024. In another sign of waning demand and sentiment potentially linked to the uncertainty, data showed that Japan’s monthly core machinery orders tumbled in April, marking the weakest reading since April 2020. The data came a day after the BOJ held its policy rate steady amid trade uncertainty, and Governor Kazuo Ueda delivered cautious remarks about the outlook, further delaying expectations for the next rate hike. It remains unclear whether Japan’s efforts to secure an exemption from higher U.S. tariffs will succeed. Japanese Prime Minister Shigeru Ishiba said on Tuesday that his country has yet to reach a comprehensive tariff agreement with the U.S., as some disagreements between the two nations remain. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed up +1.10% to 24.91.

The Japanese May Trade Balance came in at -637.6B yen, stronger than expectations of -893.0B yen.

The Japanese May Exports arrived at -1.7% y/y, stronger than expectations of -3.8% y/y.

The Japanese May Imports stood at -7.7% y/y, weaker than expectations of -6.7% y/y.

The Japanese April Core Machinery Orders came in at -9.1% m/m and +6.6% y/y, stronger than expectations of -9.3% m/m and +4.0% y/y.

Pre-Market U.S. Stock Movers

Analog Devices (ADI) climbed over +1% in pre-market trading after Cantor Fitzgerald upgraded the stock to Overweight from Neutral with a price target of $270.

Circle Internet Group (CRCL) gained more than +3% in pre-market trading after the Senate passed the Genius Act, legislation aimed at regulating stablecoins.

Hasbro (HAS) rose nearly +1% in pre-market trading after the Wall Street Journal reported that the toy maker had cut about 3% of its global workforce.

Norwegian Cruise Line (NCLH) dropped more than -1% in pre-market trading after Argus downgraded the stock to Hold from Buy.

La-Z-Boy (LZB) fell over -1% in pre-market trading after the furniture maker posted weaker-than-expected FQ4 adjusted EPS and issued soft FQ1 revenue guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - June 18th

Korn Ferry (KFY), GMS (GMS), Smith & Wesson (SWBI), Aurora Cannabis (ACB), Euroseas (ESEA).