Market Overview
U.S. stock markets ended Wednesday mixed. The Dow Jones saw a slight decline. The S&P 500 closed just below 6,000. Conversely, the Nasdaq Composite and Russell 2000 rose. Market volatility, measured by the VIX, eased. Investor sentiment remained neutral.
Major Indices
The Dow Jones Industrial Average fell 0.1% to 42,171.36.
Meanwhile, the S&P 500 slipped 0.03% to 5,980.86. It failed to hold above the 6,000 mark. 
The Nasdaq Composite, however, gained 0.13%, closing at 19,546.17.
The Russell 2000, representing small-cap stocks, performed strongest. It advanced 0.62% to 2,114.98.
The VIX index dropped 7.64% to 19.9. This signaled a decrease in market fear.
Key Market Trends & News
Geopolitical tensions influenced early trading. President Trump hinted at dialogue with Iran. This initially boosted the market. However, later remarks reversed some gains. Uncertainty about potential U.S. attacks persisted. Reports of U.S. citizen evacuations from Israel caused further alarm. Domestically, Trump deployed 2,000 National Guard troops to Los Angeles. This move highlighted internal security concerns. External issues divert attention from internal challenges.
Interest Rates & Bond Market
- The Federal Reserve announced its interest rate decision. Rates remained unchanged. Fed Chair Jerome Powell held a press conference. He stated policy would continue as is. The Fed’s dot plot signaled two rate cuts this year. This projection is not a firm commitment. Powell emphasized data dependency. Tariffs could impact inflation, he noted. However, effects might also be deflationary. The Fed needs two more months to assess conditions.
- Powell described the U.S. economy as robust. Unemployment stands at 4.2%. Inflation shows signs of cooling. Therefore, immediate rate cuts are unnecessary. While tariffs might raise prices, Powell called his overall tone non-hawkish. Experts generally agreed on a “wait and see” approach. Some even viewed the Fed’s stance as dovish. The door remains open for cuts in late 2025. Specifically, September or December cuts seem likely. This outlook aligned with prior market expectations. Thus, market impact was limited.
- The Fed is in no rush to cut rates. Goldman Sachs echoed this dovish view. They highlighted the dot plot’s two-cut forecast. The latest economic projections were also released. GDP growth forecast for 2025 dropped to 1.4%. Previously, it was 1.7%. Unemployment projections rose to 4.5% from 4.4%. Inflation forecasts climbed to 3.0% from 2.7%. Core inflation also increased to 3.1% from 2.8%. These changes suggest the Fed anticipates higher prices. Slower growth combined with higher inflation hints at stagflation risk. Powell, however, dismissed 1970s-style oil shock inflation.
- The Fed’s dot plot for the federal funds rate showed 3.9%. This matches previous projections. Two cuts are still expected this year. The current rate is 4.3%. For 2026, only one cut is projected (3.6%). One more cut is seen for 2027. This totals only four cuts over three years. This reflects tariff uncertainty. Seven FOMC members opposed rate cuts. Two favored one cut. Nine supported two cuts. Two members expected more. Powell acknowledged differing views. Yet, all agreed on Wednesday’s rate freeze.
- Economic indicators also showed some slowing. Building permits dropped to 1.393 million. Housing starts decreased to 1.256 million. Continued jobless claims remained steady at 1.945 million. Initial jobless claims also held near expectations. Economic slowdown combined with higher inflation expectations creates a dilemma. The Fed faces a difficult balance. Ten-year Treasury yields rose slightly to 4.38%. Two-year yields dipped to 3.93%. The dollar strengthened, up 0.12% to 98.51.
Commodities Market
Oil prices did not rise significantly. Brent crude settled at $76 per barrel. Geopolitical tensions kept prices near $80. Gold prices fell 0.69% to $3,382.
Major Tech Stocks Performance
- Tesla bounced back after recent declines. It recovered to the $320 range. Apple, Microsoft, and Nvidia also advanced. Broadcom rose, but Amazon, Google, and Meta declined. Software companies like Salesforce and Uber experienced drops. Palantir and Oracle, however, saw gains. Visa and Mastercard fell. Bank stocks performed well due to eased bond trading regulations. Walmart also showed gains. Pharmaceutical stocks were generally weak. Merck, however, ended higher.
- The automotive sector rebounded overall. Lucid climbed 3.26%. Rivian gained 2.84%. Tesla rose 1.80%. Ford and GM, strong in the morning, ended lower. Tesla’s recovery anticipates its robotaxi service. The stock shows convergence, trading near its 5-day moving average of $321. The 15-day average is still higher. Momentum depends on the robotaxi event. Trading volume was moderate at 84 million shares.
- Elon Musk’s comments boosted Tesla. He announced Optimus 3 is coming this year. This advanced humanoid robot will perform household tasks. Musk indicated significant improvements. His personal drug use allegations were addressed. He released clean drug test results. This aims to counter recent media scrutiny. Waymo expanded its robotaxi service. It now covers more areas in LA and San Francisco. Tesla’s robotaxi launch in Austin, Texas, is highly anticipated. However, the field is already crowded. Honda recalled 259,000 U.S. vehicles for brake issues. Tesla’s over-the-air updates prevent such recall impacts. Short interest on Tesla was 51.82%. The stock withstood selling pressure.
- The semiconductor sector saw gains. Intel, Micron Technology, and Nvidia rose. The Philadelphia Semiconductor Index gained 0.42%. SMCI also increased by 0.38%. Nvidia continues its strong performance. No major negative news impacted it. Barclays raised Nvidia’s target price to $200. Citi set a target of $180. Nvidia is exploring nuclear power applications. It partnered with Dell for AI cyber security.
- Microsoft, Nvidia, and Apple were the top three global market cap leaders. Apple’s market cap reached $2.93 trillion. Microsoft leads, collaborating with OpenAI. Amazon, Google, and Meta follow. Broadcom, TSMC, and Tesla also maintain high ranks. Tesla holds the 11th position globally. It remains in the $1 trillion club. Microsoft announced further layoffs. Thousands of sales employees will be cut. This might push unemployment rates higher.
- Quantum computing stocks also surged. IonQ rose 22%. AQTION gained 4%. These companies partner with Oracle for defense systems. AI-related stocks like Palantir and robotics firms also performed well. Cybersecurity stocks were mixed. CrowdStrike and CyberArk saw some price fluctuations. Needham recommended these stocks with high price targets. CrowdStrike’s target is $530. Zscaler’s target is $350.
Market Sentiment & Flows
The Fear & Greed Index dropped to 54. This indicates a neutral sentiment. It had previously reached ‘Greed’ territory. Approximately 3,533 stocks advanced. About 2,717 stocks declined. Small and mid-cap stocks performed relatively better today.
Upcoming Key Economic Indicators & Events
Tomorrow, Thursday, is Juneteenth. U.S. stock markets will be closed. Friday marks “Triple Witching Day.” This suggests potential high volatility. Live broadcast will resume on Friday.
Conclusion & Market Outlook
The market faces ongoing uncertainties. Geopolitical tensions persist. The Fed maintains a cautious stance. They are data-dependent. Economic indicators show slowing growth. Inflation forecasts are rising. This creates a challenging environment. Investors will monitor future data closely. The upcoming “Triple Witching Day” could bring significant movements.
Disclaimer: This content is for informational purposes only and does not constitute financial advice. Consult a qualified financial advisor before making investment decisions.