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U.S. Federal Reserve Chair Kevin Warsh speaks during his first press conference in Washington, DC, on June 17.
Credit: Brendan SMIALOWSKI / AFP via Getty Images

KEY TAKEAWAYS

• New Federal Reserve Chair Kevin Warsh refused to give any forward guidance in his first meeting on Wednesday.
• That left markets to interpret the Fed's inflation-fighting stance as a signal that rate cuts were ahead.
• Traders are pricing in an 83% probability that the Fed will hike its influential interest rate at least once this year.

Federal Reserve Chair Kevin Warsh is making one thing quite clear: the central bank will bring inflation back to 2%.

It may not happen right away, as energy disruptions caused by the war in Iran push prices higher, bringing inflation to 4%. Nor will markets get clear clues from the Fed along the way, as Warsh cuts back on “forward guidance” that gives a sense of the policy committee's next moves.

But after years of "persistently high prices" burdening U.S. households, Warsh said at his first press conference that “recent past need not be prologue” and promised to “deliver” on a return to the Fed’s 2% inflation target.

“I’ve said for years: Inflation is a choice. You bet it is,” Warsh told reporters. “And today, I'm announcing that this committee unambiguously and unanimously … decided we are going to deliver on that.”

It is a word he hammered home through repetition: “The commitment to deliver is strong, unanimous and unambiguous,” he told one reporter. “When we deliver on our price stability objectives, which we will,” he told another. And it made its way into the Fed’s far-slimmer statement: “The Committee will deliver price stability.”

Why This Matters

Warsh’s message suggests the Fed is prioritizing inflation control even if it means keeping borrowing costs higher for longer. That could affect mortgages, credit cards, investments, and expectations for future interest-rate moves.

Bond markets seem to have gotten the message, at least in their early read of the Warsh-led Fed. The 2-year U.S. Treasury yield, a proxy of markets’ views of Fed policy for the next two years, rose to 4.20% on Wednesday from 4.05% a day earlier as more investors saw a hike ahead.

“After today's meeting, we see a much higher risk that the Fed will hike this year,” wrote Aditya Bhave, U.S. economist at Bank of America, who still sees the Fed staying on hold.

Bond investors tend to worry that inflation will eat away at the fixed interest payments they get when they buy a bond. But Warsh’s first Fed meeting was “clearly hawkish,” Bhave wrote, given his emphasis on inflation and a shift among the Fed’s 18 other policymakers. 

Ahead of the Fed meeting, there was lingering concern from some investors that Warsh "would bend to political pressure" and be sympathetic to President Donald Trump’s call for lower rates, according to Natalia Lojevsky, managing director at CIFC Asset Management. It was an issue that sparked Trump’s legal battle with Warsh’s predecessor Jerome Powell. 

Instead, Warsh “came in swinging on the 2% target and used his first press conference to re-establish Fed credibility and independence,” Lojevsky said in emailed commentary.

Markets were “relatively calm, all things considered,” even as Warsh laid out a series of changes in the Fed’s policymaking style, wrote Ian Lyngen, head of U.S. rates strategy at BMO Capital Markets. 

“If nothing else, the market has renewed confidence in the Fed’s inflation-fighting ability and conviction,” Lyngen said.

Warsh laid out a “new chapter” for the Fed, with broad reviews on the Fed’s communications, data analyses, financial footprint and inflation framework—though he made clear the 2% target isn’t changing. The goal is ensuring the Fed is “clear-eyed about its mission” to ensure maximum employment and stable prices, he said.

No Hikes… Yet?

For all the focus on tackling inflation, the Fed didn’t raise its benchmark interest rate from 3.5% to 3.75%. But rate hikes could be coming.

The 18 members of the FOMC who submitted projections—Warsh didn’t since he dislikes the Fed giving hints about its future policy—displayed a clear hawkish shift. 

Gone are the rate cut projections from months ago. Instead, the median Fed official is now projecting one rate hike this year, and six of the Fed’s 19 members indicated they see two or more.

The Fed is “split down the middle,” with the other half of the Fed not favoring higher rates,  wrote James Knightley, chief international economist at the Dutch bank ING. With the Iran peace deal now at hand—and energy disruptions set to unwind—Knightley said an “extended pause” in the Fed’s benchmark rate is the most likely outcome.

However, traders seem to think a hike is quite likely. They saw an 83% probability of a Fed hike by year-end after Warsh's press conference on Wednesday, according to the CME Group’s FedWatch tool, which uses futures market pricing to determine Fed probabilities.

Forward Guidance

Warsh wasn’t keen to share his views on the Fed’s path ahead. Warsh has long been a skeptic of “forward guidance,” the Fed’s practice to give markets clues about what it may do in the future. And he batted away reporters’ attempts to get breadcrumbs.

“I can't give you any forward guidance about what we're going to do next,” Warsh said. “The good news is we'll be meeting in six weeks.”

But even as Warsh declines to share his views, other Fed officials are likely to offer perspectives on the path ahead in upcoming public appearances, according to Preston Mui, senior economist at Employ America, an economic research and advocacy organization.

“If Warsh doesn’t deliver forward guidance, the rest of his committee will,” Mui wrote.

And Warsh’s inflation-fighting message nonetheless guided markets, according to analysts at Northern Trust Asset Management.

“While the Warsh Fed may be saying less, [his] repeated emphasis on delivering price stability reverberated throughout markets,” they wrote.

News of the day for June 18, 2026

U.S. gas prices have fallen nationally, offering drivers some relief.
Credit: James Carbone / Newsday RM via Getty Images)

Stock-market futures were trending higher Thursday morning. Stocks fell yesterday on news that the Federal Reserve was open to an interest-rate hike this year; investors were still digesting the latest from the U.S. central bank, which kept rates unchanged as expected yesterday; U.S. gas prices are below $4 a gallon nationally, according to new data, amid optimism about a resolution between the U.S. and Iran; Apple's CEO said prices are likely to rise on account of memory costs; and SpaceX shares pointed a bit lower after their first-ever daily drop as a publicly traded company. Thursday is the last day of U.S. stock and bond trading for the week, with a holiday break tomorrow.

Here's what you need to know today.

Stocks Look Poised to Start Higher

U.S. stock futures were moving higher early Thursday as investors looked ahead to the prospect of a deal between the U.S. and Iran. They've been eyeing that possibility all week, but all three leading indexes fell yesterday as they re-evaluated the possibility that the Federal Reserve could have interest-rate hikes coming; the tech-focused Nasdaq Composite led the way lower. Today futures tied to the S&P 500 were recently up 0.8%; those tied to the Dow were ahead 0.4%; and those linked to the Nasdaq 100 were up 1.4%. Gold, silver and oil futures fell; bitcoin was a bit below $64,000.

Today will be the week's last trading session, with stock and bond markets closed tomorrow in observation of Juneteenth. Also expected Friday: the official signing of a memorandum of understanding between the U.S. and Iran, set to take place in Switzerland, that will kick off another round of negotiations.

Investors Digest Fed Meeting, Rate-Hike Possibilities

The Fed's announcement and press conference, which Investopedia covered live yesterday, happened during market hours, but investors will likely be some time digesting what they learned. The decision to hold benchmark interest-rates steady was as expected, but the outlook was viewed as hawkish, and CME Group's FedWatch tool now indicates a roughly 70% chance that rates will be higher by the September meeting. Several other takeaways also bear watching—including what appears to be a particular focus on price stability, half of the central bank's dual mandate, over employment; the perception by new Fed Chair Kevin Warsh that the economic data the bank uses is "old-fashioned"; and the creation of five "task forces," each with topical assignments (communications, the balance sheet, data, productivity and jobs, and inflation).

Gas Prices Below $4 Nationally

American drivers are getting some relief at the fuel pump. The national price for a gallon of regular unleaded gas has fallen a few ticks below $4 per gallon across the U.S., according to AAA data, down from more than $4.50 a month ago. That's a welcome sign as summer, a busy time for consumer travel, rolls on. That said, it's still possible to see prices above $5, with the California average at $5.64. (Indiana, on the low end, was at $3.39.) The war in Iran, which has limited shipping traffic in the Strait of Hormuz, has for months contributed to rising energy prices, which have spilled into consumers' lives: Many Americans have taken to making more-frequent, smaller, trips to the filling station to manage their spending.

Apple's Tim Cook Says Memory Costs Make Price Increases 'Unavoidable'

The effects of rising memory prices driven by AI spending have been seen across the tech sector, and yesterday another was confirmed: higher prices for Apple (AAPL) products. “Unfortunately, price increases are unavoidable,” outgoing CEO Tim Cook told The Wall Street Journal in a story published late Wednesday. “We're doing our best to mitigate the huge increases that are being passed to us, and we've been trying to shield our customers from the increases, but the situation has become unsustainable.” This was largely expected after Cook made comments along those lines during the tech giant's latest quarterly conference call, but his latest statements set it out plainly. Memory stocks, along with ETFs that track them, have been some of the stock-market's hottest this year. Apple, meanwhile, is up roughly 25% in 2026; its stock was 0.5% higher this morning premarket.

SpaceX Stock Points Lower After Yesterday's Drop

Shares of SpaceX (SPCX) did something unusual—in the context of their short lives as publicly traded assets—yesterday, finishing a trading session lower for the first time. While the stock, which ended yesterday around $192 after falling 5%, remains above its IPO and first-day open prices, the shares were as of yesterday's close some 15% below their record highs so far. It has been an eventful few days for Elon Musk's AI, space exploration and connectivity company, which in addition to going public and using its stock to pull off a big acquisition has vaulted into the ranks of the world's biggest public companies. Investor attention now turns to if, or when, the stock will be added to several indexes that underlie a range of funds. SpaceX was 0.5% lower in recent premarket trading.

The proposed changes to Social Security would limit benefits for those with higher incomes.
Credit: Getty Images

KEY TAKEAWAYS

• A proposal to cap Social Security benefits at $100,000 annually for couples could save the program billions of dollars.
• There are varying cap options that offer different levels of savings and benefit impacts, like indexing the cap to inflation or maintaining the $100,000 cap for 30 years.

• These proposed caps would primarily impact the top 20% to 30% of earners, who typically have significant assets beyond Social Security.

Some retired couples receive more than $100,000 in Social Security benefits each year. One recent proposal suggests capping these benefits to help extend the program.

More than 1.25 million retirees, or about 2% of all Social Security beneficiaries, receive $50,000 or more in benefits each year. That means some couples receive combined benefits of $100,000 or more a year. This generally occurs when both parties consistently earned more than the Social Security taxable maximum for 35 years and retired at their full retirement age. And the benefit amounts for couples with six-figure benefits will continue to rise through the annual Cost of Living Adjustment.

However, the Committee for a Responsible Federal Budget, a nonpartisan, nonprofit organization that conducts fiscal policy analysis, proposed capping a couple's annual benefits at $100,000. Initially, this proposal could save the program $100 billion to $190 billion over 10 years.

“Social Security is less than seven years from insolvency, and under the law, when it becomes insolvent, everybody's benefits get cut 24%...which for a typical couple retiring in 2033 is like $18,000,” said Marc Goldwein, senior vice president and senior policy director at the Committee for Responsible Federal Budget. “So the question is, what are we going to do to avoid that?"

Most policy analysts say either tax rates need to increase or benefits need to be reduced, Goldwein said. While the "Six-Figure Limit" alone is not enough to delay Social Security's insolvency cliff, combined with other solutions, it would help extend Social Security's lifespan.

Why This Matters

The main trust that is funding the Social Security program is set to run out of money by 2032. After that point, the law dictates that all benefits will be reduced, which the majority of beneficiaries say they will not be able to financially survive if their payments are cut.

How Would It Work?

This proposal would still reward beneficiaries with higher benefits who wait to claim benefits until after their full retirement age. Beyond that, there are three ways this proposal could be implemented:

• An inflation-indexed cap: The first option would cap benefits for couples who retire at their full retirement age to $100,000 in benefits during 2026. From there, the cap would grow with inflation rates.
• 20-year fixed cap: This option would keep a $100,000 cap for 20 years, then boost benefits annually based on the average wage increase for workers. For example, the average wage increase in 2024 was 4.84%, according to the Social Security Administration.
• 30-year fixed cap: The 30-year cap would work similarly to the 20-year cap, but it would restrict benefits to a maximum of $100,000 until 2056.

How These Options Will Impact Benefits and The Program's Longevity

These solutions would generally only lower the benefits of the top 20% to 30% of earners, the CRFB said.

"If you're getting $100,000, as a couple, in benefits, you probably have tens of millions of dollars in assets, and your Social Security benefit is not very important to you," Goldwein said. "Over time, as this phases in, it's going to affect more people further down the income ladder, but every version that we model [is always] incredibly progressive.”

The 30-year fixed cap proposal provides the greatest savings, reducing the Social Security budget shortfall over 75 years by 55%, according to CRFB estimates.

"This approach may prove effective in generating upfront savings and 'buying time' for other solvency-enhancing policies to phase in," authors of the CRFP report said.

Credit: Brendan Smialowski / AFP via Getty Images

Key Takeaways

• The Federal Reserve's policy committee signaled it will likely raise interest rates soon to combat high inflation.
• A higher fed funds rate could push up borrowing costs on many kinds of loans, including mortgages and credit cards.
• The Fed is under increasing pressure to bring inflation down to its target of 2% annually.

The Federal Reserve's monetary policy decision on Wednesday had one clear takeaway for household finances: higher interest rates for many financial products are on the horizon.

In the first meeting of the Federal Open Market Committee under its new chair, Kevin Warsh, the Fed kept its key interest rate flat. However, the committee's focus on price stability indicated it would raise rates at some point this year to stamp out inflation, which has been running stubbornly above the Fed's 2% annual goal and is rising amid the energy crunch from the Iran War.

The fed funds rate is tied directly to some loans, such as personal loans from banks, and indirectly to many other financial products, including mortgages.

"We are probably going to see a rate hike before the end of the year, but not yet," said Jacob Robbins, an assistant professor of economics at the University of Illinois at Chicago and a nonresident scholar at the Washington Center for Equitable Growth think tank.

What This Means For The Economy

A higher fed funds rate can put downward pressure on inflation, at the cost of slowing economic growth and cooling down the labor market.

The clearest signal of impending rate hikes on Wednesday came from the FOMC's quarterly summary of economic projections. It showed nine of the 18 officials who made projections believe the Fed will raise the fed funds rate by at least a quarter point before 2026 is out.

The hike would be in response to higher inflation, which the Fed now views as more entrenched in the economy than previously believed. Fed officials now expect PCE inflation to average 3.6% at the end of the year, up nearly an entire percentage point from the last round of economic projections in March.

On Wednesday afternoon, financial markets were pricing in an 85% chance of at least one rate hike by the end of the year, up from around 60% the day before, according to the CME Group's FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

The fed funds rate is the Fed's main tool for pursuing its dual mandate from Congress to keep inflation low and employment high. The policy committee sets the interest rate at which banks borrow from one another, and has a ripple effect throughout the financial world, influencing borrowing costs on many financial products.

For instance, banks' prime rates, the interest rates they offer their best customers, are directly linked to the federal funds rate. When financial markets expect rate hikes, yields on 10-year Treasuries usually rise, which pushes up mortgage rates.

The committee also sent a message about its longer-term intentions. The FOMC's policy statement explaining its rate decision used stronger language to indicate its intention to keep inflation under control.

"The Committee will deliver price stability," it said, in contrast to previous versions of the statement, which included wording about keeping employment high.

The more decisive language may have been a move to shore up the Fed's inflation-fighting credibility, given that the central bank did not actually raise interest rates this time, Robbins said.

The Fed's move had immediate impacts on financial markets, as well as longer-term implications. Major stock indexes dipped on Wednesday afternoon amid rising odds of a rate hike.

CRSP and S&P Dow Jones Indices will likely be the first to include SpaceX to their products.
Credit: Photographer: Adam Gray / Bloomberg via Getty Images

Key Takeaways

• Investors are watching the major index providers to see when they might add shares of SpaceX to their indexes.
• Some of the first index changes affecting the stock could come as soon as next week.

Mark your calendars: SpaceX could be landing in your index funds as soon as next week.

SpaceX (SPCX) will likely show up first in indexes managed by the Center for Research in Security Prices, or CRSP, and S&P Dow Jones Indices. Vanguard funds that track CRSP products, or BlackRock (BLK) and State Street (STT) ETFs that follow the S&P Total Market Index, could own the stock as early as Monday. LSEG's Russell indexes and those maintained by MSCI (MSCI) will follow.

Investors in SpaceX are eyeing the timing of possible index inclusions closely: It's generally seen as beneficial to a stock to be added to an index, which requires buying on behalf of funds that track those indexes. Timing those moves, however, isn't always easy While some index providers are clear about their timelines, making detailed announcements that include effective dates—when a stock is officially made a member of a given measure—others keep those details close, partly to stem front-running by traders looking to get ahead of index additions. More recently, a few index providers changed their rules to fast-track big new companies like SpaceX into their products.

WHY THIS MATTERS TO YOU

Stocks getting added to major indexes tend to rise in the lead up to their inclusion as funds tracking those benchmarks buy up shares.

Here's Investopedia's take on when SpaceX could—or in some cases, will—be added to a selection of indexes.

Here's how CRSP does it: Fast-tracked IPOs are considered for inclusion after five days of trading. While SpaceX, like most IPOs, didn't trade for a full day on Friday, its first session as a publicly traded stock, it still counts. That means the first day it can be added to CRSP indexes, which include the CRSP US Total Market Index, is Monday, since Friday is a market holiday in observation of Juneteenth. A spokesperson for Morningstar, which owns CRSP, directed Investopedia to its methodology and said it would not issue an announcement regarding SpaceX.

SpaceX will enter some S&P Dow Jones Indices, including the S&P Total Market Index, before the start of trading Monday, according to a message sent to S&P clients that was viewed by Investopedia. Dozens of other S&P measures, such as the Dow Jones Global and the S&P World indexes, will also add the stock. (The S&P 500 won't immediately include SpaceX, since the provider decided not to change its eligibility criteria to fast-track big IPOs into the benchmark index.)

LSEG's Russell Indices also has an IPO fast-entry rule that makes eligible companies candidates for inclusion after five trading sessions. The index provider, however, indicated that because SpaceX's IPO took place not long before a scheduled review of its Russell US products—which cover indexes including the Russell 1000—it would consider it in that context, meaning an effective date of June 29. An LSEG spokesperson referred Investopedia to its methodology.

MSCI will also be adding SpaceX to its products, which include the All Country World Index or the "ACWI", effective June 29, it said Friday.

Coming into Wednesday's session, SpaceX shares were roughly 50% above their IPO price.
Credit: Michael Nagle / Bloomberg / Getty Images

Key Takeaways

• Shares of SpaceX retreated Wednesday, finishing a day lower for the first time in its short public-market history.
• Now investors are watching for announcements regarding the inclusion of SpaceX in some high-profile indexes.

There hasn't been much red glare on traders' screens during SpaceX's rocketlike post-IPO run. Today, though, there was.

Shares of SpaceX (SPCX), Elon Musk's all-in-one AI, space exploration and connectivity business, ended Wednesday down about 5% to around $192, sliding as low as $187 earlier in the day. That meant the stock—which finished Friday, its first day as a public company, above its IPO and open prices and then continued rising the next two sessions—booking its a first-ever daily retreat. Day-to-day price fluctuations are no big deal, but given the bullish reception for and massive attention paid to SpaceX, today's were noteworthy: As of today's close, the shares were about 15% below yesterday's intraday high just under $226.

The action in SpaceX has quickly put it in the biggest of the stock market's big leagues. While its IPO price, $135, implied a market capitalization of about $1.8 trillion, indicating a place near the bottom of the top 10 companies by market value, but its subsequent gains have it moving in and out of the top five, jockeying for position with Amazon (AMZN) and Microsoft (MSFT). They've made Elon Musk a trillionaire on paper. And they've established the company, by some measures, as one of the Big Tech elite in the eyes of retail investors.

"This doesn't feel like the typical retail meme activity that accompanies parabolic moves," according to a note from Vanda Track that cited buying among retail investors in SpaceX shares far outstripping ETFs with space themes or geared toward using leverage to supercharge bets on the stock. "SpaceX is fast becoming a 'retail darling'. For years, that title was reserved for FAANG stocks, before evolving into the Magnificent 7. We think the next evolution is the FAB 10: the Mag 7 names plus SpaceX, OpenAI and Anthropic. Together, these companies sit at the forefront of AI and technology, and are increasingly viewed by investors as the businesses most likely to shape the next decade."

Investors are now watching the possibility that SpaceX could soon be added to some high-profile indexes, which is expected to spur buying by funds that track those measures.

SpaceX rose yesterday, climbing about 5% after announcing the all-stock acquisition of AI coding agent Cursor. That had them up nearly 50% from their IPO price. Read Investopedia's full coverage of today's trading here.

This article has been updated since it was first published to reflect the close of trading.

Stocks were off to a strong start this week after the U.S. reached a deal with Iran over the weekend.
Credit: Michael M. Santiago / Getty Images

Key Takeaways

• Wells Fargo analysts raised their year-end target for the S&P 500 on growing optimism after the U.S. reached a peace deal with Iran.
• Several other analysts have also pointed to SpaceX's blockbuster market debut Friday as a bullish signal of investor appetites.

The events of the past few days have some Wall Street experts feeling good about U.S. stocks.

Analysts at Wells Fargo this week lifted their year-end target for the S&P 500 to 7950 from 7300, on anticipation of easing macroeconomic concerns after the U.S. reached a peace deal with Iran over the weekend. The index, recently around 7500, rallied Monday following the news, though it later pulled back as tech stocks retreated. (Read Investopedia's full coverage of today's trading here.)

Meanwhile, SpaceX's (SPCX) blockbuster market debut could also be a positive signal for investor appetites that could kickstart the "next leg of the bull market," sending the benchmark as high as 9000, Evercore ISI analysts wrote over the weekend. The stock, down about 4% in recent trading, has nevertheless climbed some 40% from its initial public offering price, a move that had made CEO Elon Musk the world's first trillionaire.

Why This Matters to Investors

Upbeat viewpoints from Wells Fargo and Evercore suggest reasons investors could be more optimistic about the market's outlook for the year these days.

Wedbush analysts led by longtime tech bull Dan Ives in a note to clients Tuesday called the IPO a "Goldilocks outcome" for the tech sector, "disproving a lot of the bear noise and fears" seen in recent weeks. "We believe the tech rally we saw to kick off the week is a sign of the times," and a "green light to own tech stocks," he wrote.

The bullish notes follow target hikes from other firms in recent weeks, despite worries about the war and rising inflation, on expectations of strengthening fundamentals and improving sentiment around the AI trade after a flurry of better-than-expected corporate earnings reports.

With a possible end of the war reducing inflation risks, and expectations that the Fed could raise rates this year "already priced in," Wells Fargo analysts now see a summer "everything rally" in store, with "room for upside in the AI trade." A Federal Reserve interest-rate decision is slated to arrive later today, and the arrival of a new Fed chair could signal a new direction for rate policy. (Investopedia is covering today's Fed meeting live here.)

The Wells Fargo analysts warned they'd be more cautious heading into midterm elections, however, given historical performance trends in midterm years, and worries that potential "jawboning around policy measures to slow AI progress could drag the index."

UBS analysts, who had raised their S&P 500 target to 7900 from 7500 last month, said in a post Tuesday that a new White House policy directive restricting foreign access to Anthropic's latest models has raised some concerns about the possibility that efforts to regulate AI could "weaken investor confidence in semiconductor demand" and throw a wrench in the AI sector's growth.

"For investors, this matters because AI, and especially AI-related semiconductors, have been a central driver of equity gains this year, with semiconductor stocks accounting for more than half of the S&P 500's year-to-date advance," they wrote, though the analysts said they "continue to advocate exposure across AI-related equities."

News of the day for June 17, 2026

The Dow closed at another record high on Tuesday, while a sell-off in chip stocks sent the the S&P 500 and Nasdaq lower.
Credit: Spencer Platt / Getty Images

Stock futures are slightly higher on Wednesday as investors await the Federal Reserve's decision on interest rates; the Fed's policy committee is widely expected to leave its key rate unchanged, but investors will be focused on what new Chair Kevin Warsh has to say about the economic outlook; retail sales data is due to be released this morning; SpaceX stock is extending its strong post-IPO run; and chip stocks are rising ahead of the opening bell after posting steep losses yesterday. Here's what you need to know today.

Stocks Tick Higher Ahead of Fed Decision

Stock futures are pointing to modest gains for major indexes this morning as investors await news from the Federal Reserve this afternoon. (More on that below.) Futures tied the S&P 500 and the tech-focused Nasdaq were recently up 0.1% and 0.5%, respectively, while Dow Jones Industrial Average futures were little changed. The Dow closed at a record high yesterday for the second consecutive session, while the S&P 500 and Nasdaq Composite dropped amid a steep decline in chip stocks.

Other asset classes are little changed this morning ahead of the Fed's announcement. WTI crude oil futures, which have fallen sharply in recent days on optimism that an end to the Iran war could be near, were up less than 1% at $77 per barrel. Gold futures were steady at $4,345 an ounce, while bitcoin was at $64,800, down from an overnight high around $66,000. The yield on the 10-year Treasury note, which affects interest rates on all sorts of loans, was unchanged at 4.45%.

Fed Expected to Hold Rates Steady in Warsh's 1st Meeting as Chair

The Federal Reserve is likely to announce today that the Federal Open Market Committee decided to leave interest rates unchanged. Investors will pick apart the details of the FOMC's policy statement, which is due for release at 2:00 p.m. ET along with the quarterly economic projections of committee members. Market participants will be particularly focused on Fed Chair Kevin Warsh's press conference, which is scheduled to start half an hour after the rate decision is announced. Warsh, who has said he wants to change how the Fed communicates its expectations for future rate moves, took over the top spot after Jerome Powell's term as chair expired last month. President Donald Trump frequently criticized Powell for not cutting interest rates more aggressively. Warsh, who was nominated to the position by Trump, may not have an easy time steering the Fed to cut rates any time soon given that inflation is running at a three-year high, in large part due to the surge in fuel prices as a result of the Iran war.

Retail Sales Report Due This Morning

The Census Bureau is scheduled to release retail sales numbers that will provide the latest indication of how consumer spending is holding up in the face of high fuel prices. The report, due to be released at 8:30 a.m. ET, is expected to show that retail spending rose 0.5% in May, the same rate as the month before, according to economists surveyed by Dow Jones Newswires and The Wall Street Journal. The surge in fuel prices since the Iran war began in late February has led U.S. drivers to put less gas in their tanks and to seek out cheaper options, while adjusting other aspects of their spending.

Will SpaceX Stock Extend Its Post-IPO Rally?

SpaceX shares are slightly higher ahead of the opening bell, putting the stock on track to post gains for the fourth straight session since the company carried out its massive IPO last week. Coming into today, the stock has gained about 50% from its IPO price of $135. On Tuesday, SpaceX briefly surpassed Amazon (AMZN) as the world's fifth-most valuable company by market capitalization, and was on the heels of Microsoft (MSFT) for fourth place on the list. At its high point yesterday, SpaceX had a market cap of nearly $3 trillion, a level that Apple (AAPL), the first company to hit that milestone a few years ago, took four decades to accomplish. SpaceX shares were up 1% at about $204 in recent premarket trading.

Chip Stocks Rebound from Tuesday's Sell-Off

Shares of major chipmakers are rising this morning after steep declines for the sector yesterday sent the S&P 500 and Nasdaq Composite sharply lower. The iShares Semiconductor ETF (SOXX) was up more than 2% in recent premarket trading, after tumbling 6% yesterday. Shares of Intel (INTC), Advanced Micro Devices (AMD), Micron (MU) and Marvell Technology (MRVL) were each up about 3%, while Nvidia (NVDA) and Broadcom (AVGO) posted more-modest gains.

Accenture shares have lost nearly 40% of their value since the start of the year.
Credit: Marcin Golba / NurPhoto / Getty Images

Key Takeaways

• Accenture's latest earnings are slated to be released Thursday morning, with traders anticipating a big swing from the IT and consulting firm's stock.
• Revenue and profits are expected to have grown in Accenture's most recent quarter, but the stock has taken a hit amid concerns about AI disruption.

Accenture is set to report earnings ahead of the opening bell Thursday, with traders anticipating a big move from the IT and consulting firm's stock following the results.

Based on recent options pricing, Accenture shares are seen swinging up to about 7% in either direction by the end of the holiday-shortened trading week. A move of that size from Tuesday's close could see shares rise as high as $177, or fall below $154, which would be Accenture's lowest level since early 2019.

Accenture shares are down nearly 40% since the start of the year, amid worries about AI-driven disruption impacting the IT and professional services industries where Accenture does much of its business.

Why This Matters to Investors

A strong print Thursday could help improve sentiment around Accenture's stock, which has slumped in recent months.

Ahead of the report, Goldman Sachs analysts said they see investors still being "negatively positioned" on Accenture and the broader IT sector. The analysts said said in addition to the AI disruption worries, geopolitical disruptions like the Iran war could also negatively impact spending among businesses, which could hamper Accenture's sales.

Accenture is expected to report fiscal third-quarter revenue of $18.8 billion, up 6% year-over-year, along with adjusted earnings per share of $3.72, up from $3.49 the same time a year ago. Accenture's bookings are seen growing to $20.97 billion, up about 6.5% year-over-year.

Of the six Wall Street analysts with current ratings tracked by Visible Alpha, three have said they consider Accenture a "buy," while three have neutral ratings. Their mean target of $236 would suggest more than 40% upside from Tuesday's close.

The recently introduced Senate bill would cut taxes primarily for middle-income earners and tax millionaires to offset the cost.
Credit: Kelvin Murray / Getty Images

Key Takeaways

• A proposed Senate bill would eliminate federal income tax for individuals earning $46,000 or less.
• The bill would fund these tax cuts by introducing higher tax rates for individuals earning over $1 million.

A bill recently introduced by Senate Democrats would eliminate federal income taxes for individuals earning $46,000 or less and lower them for those making up to $80,500.

The Working Americans' Tax Cut Act, introduced March 12 by Sen. Chris Van Hollen, D-Md., and Sen. Mark Kelly, D-Ariz., has 19 Senate cosponsors. Rep. Don Beyer, D-Va., has introduced a companion bill in the House. It would create an alternative maximum tax that caps the tax liability of low- and middle-income earners.

To fund these tax cuts, the bill would establish new marginal tax rates for those earning more than $1 million.

What This Means For You

The recently introduced Senate bill would cut taxes primarily for middle-income earners and tax millionaires to offset the cost. The bill would need to pass both chambers and be signed by the president.

“Far too many Americans are working hard for their paychecks but still having trouble making ends meet. These Americans who are earning just enough to get by ... should not have to pay a federal income tax,” said Sen. Chris Van Hollen (D-MD) in a press release.

The alternative maximum tax would set an exemption—$46,000 for single filers, $92,000 for joint filers—and cap the tax owed on income above that exemption at 25.5%. Single filers earning less than $46,000 would owe no federal income tax.

The alternative maximum tax would work in tandem with the existing taxation system. "A filer would compute their tax under both the standard tax schedule and the alternative maximum. If the alternative produces a lower figure, they pay that amount instead," according to an analysis by the Yale Budget Lab.

Here's how that would work. Take a single filer earning $66,000. Under the bill's cap, they would subtract the $46,000 exemption from their income, leaving $20,000. Their tax bill would be capped at 25.5% of that amount: $5,100.

Under the present system, the same filer would subtract the $16,100 standard deduction, leaving $49,900 in taxable income, and owe about $5,800 based on the 2026 marginal brackets. Because that exceeds the $5,100 cap, they would pay $5,100, saving about $700.

The right-leaning National Taxpayers Union called the changes overly complicated. "The alternative minimum tax is the kind of confusing mechanism that legislators should be working to excise from the tax code," its analysis argued.

Not every filer would qualify for the cap. Only filers with incomes below 175% of the exemption ($80,500 for single filers) would qualify.

"This provision would benefit relatively few people among the poorest 20 percent or richest 20 percent of Americans and would mainly benefit the middle 60 percent," according to an analysis by the Institute on Taxation and Economic Policy, a left-leaning think tank. "Many people among the poorest 20% would not benefit because their income tax liability is already zero."

The bill would offset most of the cost through a new surtax on millionaires. The Tax Foundation estimates the alternative maximum tax would reduce federal revenue by about $1.6 trillion over a decade, while the surtax would raise about $1.5 trillion, leaving a net cost of $86 billion over 10 years.

Single filers earning more than $1 million would pay an additional 5% on income between $1 million and $2 million, 10% between $2 million and $5 million, and 12% on income above $5 million.