On Wednesday, it appears that U.S. stocks could see a slight increase, as investors weigh potential actions following the upcoming Federal Reserve’s interest rate decision and the escalating Israel-Iran conflict.
Today, the Dow Jones Industrial Average hovered close to 42,246 points, rising by 30 points at the opening bell. Simultaneously, the S&P 500, a key U.S. index, stayed near its record highs with a minor increase of 0.01%. The Nasdaq Composite remained unchanged, also registering a slight gain of 0.01%. In general, all three major indices showed a slight upward trend, but were held back as the ongoing Middle East conflict affected investor confidence.
Israel-Iran war weighs on markets
In my analysis, while the stocks seemed poised to maintain their recent growth, there was a noticeable absence of confidence in the market regarding further upward momentum. On Wednesday, Ayatollah Ali Khamenei, Iran’s Supreme Leader, declared that Iran would not yield to Israel, which could potentially impact global markets.
The Iranian leader made his remarks following President Donald Trump’s post suggesting Iran should unconditionally capitulate, sparking widespread speculation that the U.S. may become involved in the ongoing conflict.
Khamenei warned that U.S. involvement would be “to its own detriment.”
Engaging in this situation [conflict] would undoubtedly be a disadvantage for the U.S., with potential losses much more significant compared to the possible damage Iran might experience.
— Khamenei.ir (@khamenei_ir) June 18, 2025
1) In a steady trend, U.S. Treasury yields remained mostly stable given the current situation, keeping the 10-year Treasury note at 4.385% and the 2-year note at 3.948%. The price of oil has been on an upward trajectory since Israel’s unexpected attack on Iran, resulting in increased tensions that led to Iran retaliating by striking Tel Aviv and other areas within Israel.
Currently, a sense of vulnerability is affecting various investment assets, causing cryptocurrencies to drop. This downward trend is predominantly driven by Bitcoin (BTC), which has lost its gains over $108,000 and now trades below $105,000.
Investors await Fed’s rate decision
In addition to monitoring the ongoing Middle East conflict, investors will also closely watch the Federal Reserve’s policy decision that is set for later today.
Federal Reserve Chair Jerome Powell, who’s been under increasing pressure from Trump to lower interest rates in recent months, is set to address a gathering at 2 p.m. ET today. Most analysts predict that the central bank will maintain current rates, but they’ll be closely watching the “dot plot” for signs about whether the projected two rate cuts are still being considered. In simpler terms, everyone wants to know if the Fed is still planning to lower interest rates twice as previously suggested.
Investors are also digesting the latest data on weekly jobless claims.
According to recent data from the Labor Department, the number of new unemployment claims has remained close to its highest level for eight months, with approximately 245,000 initial jobless claims filed during the last week, slightly less than the projected 250,000 in the week ending June 7.
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2025-06-18 17:15