Stock Index Futures Muted After Three-Day Rally, FOMC Meeting in Focus

June S&P 500 E-Mini futures (ESM26) are down -0.01%, and June Nasdaq 100 E-Mini futures (NQM26) are up +0.01% this morning, taking a breather after a three-day rally, while investors turn their attention to the first Federal Reserve meeting under Kevin Warsh.

The price of WTI crude fell more than -2% on Tuesday as expectations that the Strait of Hormuz would reopen this week continued to unwind the geopolitical risk premium embedded in the market. U.S. President Donald Trump said on Monday at the start of the Group of Seven talks that “the deal is already signed and the strait is already partially opened,” adding that “ships are starting to go out now, and on Friday it will be completely opened.” Meanwhile, Morgan Stanley and Goldman Sachs lowered their oil price forecasts for the coming quarters, with the latter now expecting Persian Gulf exports to return to pre-war levels by the end of July. The 10-year T-note yield fell three basis points to 4.45% as lower oil prices eased inflation concerns.

In yesterday’s trading session, Wall Street’s main stock indexes closed sharply higher, with the Dow posting a new record high. The Magnificent Seven stocks climbed, with Meta Platforms (META) rising over +4% and Nvidia (NVDA) gaining more than +3%. Also, chip and AI infrastructure stocks rallied, with Western Digital (WDC) jumping over +16% to lead gainers in the S&P 500 and Nasdaq 100, and Micron Technology (MU) surging more than +10%. In addition, travel stocks advanced as oil prices sank, with Royal Caribbean Cruises (RCL) climbing over +6% and United Airlines Holdings (UAL) rising more than +3%. On the bearish side, Fox Corp. (FOXA) tumbled over -16% and was the top percentage loser on the S&P 500 after the company agreed to acquire Roku in a deal valued at about $22 billion, including debt.

Economic data released on Monday were lukewarm. U.S. industrial production rose +0.1% m/m in May, weaker than expectations of +0.3% m/m, while manufacturing production was unchanged m/m, weaker than expectations of +0.3% m/m. Separately, the U.S. June Empire State manufacturing index fell to 5.7, weaker than expectations of 13.2.

“The equity market started the week with a boost from the U.S.-Iran deal, but it will quickly search for a new source of momentum. While that won’t come in the form of a Fed rate cut, this week’s meeting will still be an opportunity for investors to get a read on how new Chair Kevin Warsh may pursue his longer-term agenda,” according to Chris Larkin at E*Trade from Morgan Stanley.

The Federal Reserve kicks off its two-day meeting later in the day, the first helmed by new Chairman Kevin Warsh. The central bank is widely expected to keep the Fed funds rate unchanged in a range of 3.50% to 3.75% on Wednesday, as it assesses how the Iran war’s energy-price shock is filtering through the economy. Investors will be watching for any signals on whether a rate hike is likely. Economists expect the FOMC to remove the so-called “easing bias” from its post-meeting statement and instead signal that its next policy move is just as likely to be a hike or eliminate the line in question altogether. Investors will also focus on how Warsh communicates at the press conference. In addition, the Fed will release updated projections for the economy along with its “dot plot” interest-rate forecasts, and there is speculation that Warsh may choose not to submit his dots to signal his opposition to so-called forward guidance.

On the economic data front, investors will focus on the U.S. Import and Export Price Indexes, set to be released in a couple of hours. Economists expect the import price index to rise +0.9% m/m and the export price index to rise +1.2% m/m in May, compared to the previous month’s figures of +1.9% m/m and +3.3% m/m, respectively.

U.S. Building Permits (preliminary) and Housing Starts data will also be released today. Economists expect May Building Permits to be 1.420 million and Housing Starts to be 1.430 million, compared to the April figures of 1.423 million and 1.465 million, respectively.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.45%, down -0.76%.

The Euro Stoxx 50 Index is up +0.83% this morning, extending the previous session’s rally sparked by an interim peace agreement between the U.S. and Iran. Oil prices extended their declines, easing inflation concerns and buoying market sentiment. Industrial and bank stocks were among the biggest gainers on Tuesday. Citigroup strategists said in a note on Tuesday that a wide range of sectors remain below pre-conflict levels, suggesting greater potential for a second phase of the recovery. The ZEW economic research institute said on Tuesday that German investor sentiment improved much more than expected in June amid hopes that the Middle East conflict will end soon and lead to lower energy prices. Separately, final data from the statistics agency ISTAT confirmed that the Italian annual inflation rate rose to 3.2% in May. Investor focus is now shifting to this week’s policy decisions from the Fed and the Bank of England, while other European central banks, including those of Switzerland, Norway, and Sweden, will also announce their monetary policy decisions. In corporate news, STMicroelectronics (STMPA.FP) dropped over -2% after announcing plans to issue $1.5 billion worth of convertible bonds.

Italy’s CPI, Germany’s ZEW Economic Sentiment Index, and Eurozone’s ZEW Economic Sentiment Index were released today.

The Italian May CPI rose +0.4% m/m and +3.2% y/y, in line with expectations.

The German June ZEW Economic Sentiment Index came in at 10.5, stronger than expectations of -5.8.

The Eurozone June ZEW Economic Sentiment Index arrived at 9.5, stronger than expectations of -7.2.

Asian stock markets today settled mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.11%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +0.13%.

China’s Shanghai Composite Index closed slightly lower today as investors digested mixed economic data from the country. Real estate and consumer stocks underperformed on Tuesday. Limiting losses, technology, rare earth, and new energy stocks advanced. Data from the National Bureau of Statistics released on Tuesday showed that China’s consumer spending contracted for the first time since the pandemic in May, while investment weakened in the first five months of 2026, highlighting risks that continue to weigh on the economy. Separate data showed that China’s home prices continued to decline in May, worsening a property crisis that remains a significant drag on domestic demand. At the same time, industrial production picked up pace last month, largely driven by China’s export resilience. The batch of data underscored a two-speed growth pattern in the world’s second-largest economy, with factories supported by surprisingly resilient exports while domestic demand weakened amid a multi-year property market slump. ING’s Lynn Song said that China is likely to introduce additional measures to support consumption, given the emphasis on strengthening domestic demand in the country’s five-year plan. In other news, The Information reported on Tuesday that Chinese AI lab DeepSeek completed its first funding round, raising more than 50 billion yuan ($7.40 billion) under an unusual deal structure. In corporate news, MMG Limited plunged over -11% after the metals miner announced plans to raise about $1.60 billion through a share placement and the issuance of convertible bonds.

The Chinese May Industrial Production rose +4.5% y/y, stronger than expectations of +4.4% y/y.

The Chinese May Retail Sales fell -0.6% y/y, weaker than expectations of -0.3% y/y.

The Chinese Fixed Asset Investment fell -4.1% y/y in the January-May period, weaker than expectations of -2.3% y/y.

The Chinese May Unemployment Rate was 5.1%, stronger than expectations of 5.2%.

Japan’s Nikkei 225 Stock Index closed slightly higher today, hitting a new record high after the Bank of Japan delivered a widely anticipated rate hike. Metal and conglomerate stocks outperformed on Tuesday. The benchmark index briefly climbed above the 70,000 mark after reopening from the midday recess. The BOJ raised its benchmark rate by a quarter percentage point to 1.00% on Tuesday, the highest level since 1995, reinforcing its policy stance against the inflationary risks stemming from the Iran war-driven surge in energy costs. The 7-1 decision ended a pause that had been in place since last December. Board member Toichiro Asada dissented, saying he preferred to stand pat due to the risks the Middle East conflict poses to Japan’s production and employment. The BOJ warned in its policy statement of the risk that underlying inflation could exceed its 2% target due to high energy prices, while adding, “Accommodative financial conditions are expected to be maintained after the change in the policy interest rate, continuing to firmly support economic activity.” The BOJ also decided to pause its bond tapering program from April next year and continue purchasing roughly 2 trillion yen ($12.5 billion) of Japanese government bonds per month. Citi Research strategists said the outcome of the BOJ meeting looks “ideal” for Japan’s equity markets, noting that the decision “maintains accommodative monetary conditions while suppressing sharp fluctuations in exchange rates and long-term interest rates.” In corporate news, Ride-hailing app Go Inc.’s shares gained 10% in their Tokyo trading debut in Japan’s biggest initial public offering of the year to date. Investor attention for the remainder of the week is on Japan’s trade and inflation data for May. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -10.61% to 31.09.

Pre-Market U.S. Stock Movers

SpaceX (SPCX) surged over +10% in pre-market trading, putting the rocket and AI company on course to surpass Amazon.com’s total market capitalization on only its third trading day.

AI infrastructure stocks climbed in pre-market trading, with Western Digital (WDC) rising more than +5% and Seagate Technology Holdings (STX) gaining over +4%.

Qualcomm (QCOM) advanced more than +4% in pre-market trading after CEO Cristiano Amon said the company is developing more than 40 new AI device designs.

Dynatrace (DT) gained over +2% in pre-market trading after UBS upgraded the stock to Buy from Neutral with a price target of $60.

Dave & Buster’s (PLAY) plunged more than -14% in pre-market trading after the entertainment and dining chain posted weaker-than-expected Q1 results.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Tuesday - June 16th

John Wiley & Sons (WLY), La-Z-Boy (LZB), IperionX (IPX).