Market Overview at the Closing Bell
The major U.S. stock indexes climbed higher Wednesday as investors awaited the Federal Reserve’s latest interest rate decision while monitoring ongoing tensions in the Middle East. At the market close, the Dow Jones Industrial Average gained 258 points, or 0.6%, to finish at 42,403.03. The S&P 500 advanced 0.5% to 6,010.41, while the Nasdaq Composite rose 0.6% to 19,637.94.
Markets showed resilience despite geopolitical concerns as the Israel-Iran conflict entered its sixth day. Iran’s supreme leader warned that the U.S. would face “irreparable damage” if it entered the conflict, while President Donald Trump has threatened Iran with potential military action.
“The market just seems very keen to fade geopolitical risk,” Zachary Hill, head of portfolio management at Horizon Investments, told CNBC. “That has been historically the right thing to do, so I think that’s kind of what’s driving us so far today.”
Fed Decision in Focus
The Federal Reserve’s interest rate decision, scheduled for 2 p.m. ET, remains the day’s most anticipated event. The central bank is widely expected to maintain rates at the current 4.25%-4.5% range, but investors will be closely watching Fed Chair Jerome Powell’s comments and the updated “dot plot” of rate expectations.
Money markets are currently pricing in approximately 46 basis points of rate cuts by the end of 2025, with a 56% chance of a 25-basis-point cut in September, according to CME Group’s FedWatch tool.
President Trump criticized Fed Chair Powell earlier today, calling him “stupid” and expressing doubt that the central bank would cut interest rates. “Europe had 10 cuts, and we had none,” Trump remarked outside the White House.
Housing Data Disappoints
Economic data released Wednesday showed new housing construction hit its lowest level in five years. Housing starts ran at a seasonally adjusted annual rate of 1.256 million for May, down 9.8% from April and well below economists’ expectations of 1.35 million. Building permits also declined more than anticipated, totaling 1.393 million, a 2% drop from the prior month.
Initial unemployment claims for the week ending June 14 totaled 245,000, slightly better than the expected 246,000 and down 5,000 from the previous week.
Notable Stock Movers
Among today’s standout performers, Tesla (TSLA) gained 1.93%, while Intel (INTC) rose 2.45%. Financial stocks showed strength with Goldman Sachs (GS) up 2.17% and JPMorgan Chase (JPM) advancing 2.15%.
On the downside, Visa (V) fell 3.17%, while PayPal (PYPL) dropped 3.14%. Other notable decliners included Dow Inc. (DOW) at -2.41% and JD.com (JD) at -2.20%.
Circle Internet (CRCL) shares rose 1.4% after the U.S. Senate passed a bill to create a regulatory framework for stablecoins. Scholar Rock (SRRK) surged 21.9% after announcing positive results from a mid-stage trial of its experimental weight-loss drug used in combination with Eli Lilly’s (LLY) treatment.
Earnings on Deck
After today’s market close, investors will be watching for earnings reports from Smith & Wesson Brands (SWBI) and Aurora Cannabis (ACB). Smith & Wesson is expected to see significant post-earnings volatility, with options implying a potential move of approximately 13.06% in either direction.
Earlier today, several companies reported results before the market opened, including Kroger (KR), Progressive Corp (PGR), and GMS Inc (GMS).
Looking Ahead
Market participants will continue to monitor developments in the Middle East, with concerns that escalating tensions could potentially disrupt oil supplies. The U.S. administration is reportedly considering various options, including joining Israel in strikes against Iranian nuclear sites.
The CBOE Volatility Index, often referred to as the market’s “fear gauge,” fell 0.93% to 20.67 points today, suggesting some easing of investor anxiety despite ongoing geopolitical concerns.
As markets today close higher, investors remain cautiously optimistic while awaiting the Fed’s decision and monitoring both corporate earnings and international developments that could impact stock market performance in the days ahead.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.