Chartstopper: June 18, 2026

This Week

There were three big events for markets this week.

1. (By far!) The U.S. and Iran have a (temporary) deal. They agreed to a 60-day memorandum of understanding, and signed it yesterday. The interim deal provides time to negotiate a permanent deal, while also ending fighting (including Israel and Lebanon), reopening the Strait of Hormuz (ships are already moving through) and including a commitment from Iran to never procure or develop nuclear weapons (among other stipulations).

In response, U.S. oil prices are down to about $75 per barrel – a three-month low – though that’s still about 10% above pre-conflict levels, and experts warn it will take “months” for oil markets to normalize if the truce holds.

2. The Federal Reserveis more worried about inflation. At the first Fed meeting under Chair Kevin Warsh, the Fed left rates unchanged, as expected. However, the Fed also removed language suggesting the next move was likely a cut.

This first meeting showed how Chair Warsh is already starting to remake the Fed by removing forward guidance from the press release and opting out of providing economic projections. For the remaining 18 members that submitted projections, the median estimate for the fed funds rate now calls for one hike this year (barely edging out no change), up from one cut in March, as Fed members now expect core PCE inflation to end the year at 3.3% year-over-year, up from 2.7% in March. Projections for the unemployment rate were actually revised down.

Markets are going even further than the Fed, now pricing 40 basis points (bp) in hikes this year, up from 20bp before the meeting.

3. Despite energy-related inflation, consumer spending stayed resilient in May. Nominal headline retail sales rose +0.9%from April in part due to a +3.4% increase at gas stations. Still, “core” retail sales, which excludes gas stations and other volatile categories, grew +0.7%, likely still supported by bigger-than-usual tax refunds earlier this year.

For markets, the peace deal outweighed rising rate hike risks, with the Nasdaq-100® ending the week up 3% and 10-year Treasury yields down a few bp to 4.45%.

Next Week

Here are the top events I’m watching next week:

• Tuesday: S&P Manufacturing and Services PMIs (Jun. Prelim.)
• Thursday: PCE Inflation (May), Real Consumer Spending (May), Real GDP (Q1 Revision), Jobless Claims