Global Stock Rally Cools, BOJ Hikes as Expected: Markets Wrap

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June 16, 2026 - 06:26

7 minutes

(Bloomberg) — Global stocks wavered as investors paused to assess the durability of the relief rally fueled by the US-Iran deal to reopen the Strait of Hormuz, while awaiting rate decisions from several major central banks this week.MSCI Inc.’s index of world equities seesawed between gains and losses after climbing more than 1% in each of the last three sessions. US equity futures edged lower after the S&P 500 added 1.7% and the tech-heavy Nasdaq 100 rallied 3.1% on Monday. Brent crude slipped to trade below $83 a barrel following the biggest drop in more than two weeks.The Bank of Japan raised its benchmark rate by a quarter percentage point to 1%, the highest level since 1995. The yen, which has remained under pressure even as the BOJ gradually increases borrowing costs, pared gains against the dollar after the move. The Nikkei 225 rebounded, with analysts citing relief that the decision matched market expectations. The advance in Japanese stocks helped lift the broader Asian benchmark about 0.5% after a listless morning session.“Markets will take time to settle, Hormuz flows will take time to normalize, and inventories will need to be replenished,” ANZ Bank economists including Matthew Galt wrote in a note. “We therefore see few immediate implications for central banks’ reaction functions. At the margin, a deal, if successful, may reduce pressure to tighten policy, but developments over the coming months will be closely monitored.”Meanwhile, the Reserve Bank of Australia is expected to keep interest rates unchanged on Tuesday for the first time this year amid signs the economy is beginning to soften. The decision would mark another key event in a week packed with central bank meetings, with the Federal Reserve’s policy verdict due on Wednesday.US President Donald Trump and Vice President JD Vance signed an electronic copy of a memorandum of understanding with Iran, a senior US official said in a call with reporters. Hormuz “is already partially opened,” and “it’ll be completely opened” Friday, Trump said during a meeting with French President Emmanuel Macron.Global stocks and bonds climbed on Monday as the US-Iran deal spurred a decline in oil prices and raised hopes that the war that has jolted markets since the end of February may be close to an end. Investors continue to monitor developments in the Middle East, seeking clarity on how the planned reopening of the waterway —which carried about a fifth of all oil supply before the war — is progressing.Morgan Stanley made substantial cuts to its oil-price forecasts for the coming quarters. While key risks remain, this is a key step towards a de-escalation of the conflict and higher oil exports via the Strait of Hormuz, analysts including Martijn Rats wrote in a note, referring to the interim agreement between Washington and Tehran that is slated to be signed in Switzerland on Friday.Elsewhere in markets, the dollar and 10-year Treasuries held steady. Bitcoin fell about 0.5% while gold prices edged higher.“The easy part of the rally has already happened,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore. “The US–Iran peace framework allowed investors to quickly price out some oil and inflation risk, but the next leg needs confirmation — not just on whether the ceasefire holds, but whether oil flows through Hormuz can actually normalize smoothly.”“The BOJ hike is helping the Nikkei because it came largely as expected,” she added. “This does not materially change Japan’s earnings story or liquidity backdrop.”Economists expect the Fed to keep its benchmark rate in a range of 3.5% to 3.75% as it meets under new Chairman Kevin Warsh for the first time. Swaps traders are pricing in less than an 80% chance of a quarter-point hike by December.Meanwhile, the Bank of England and Swiss National Bank are also widely anticipated to stand pat this week. Their decisions come after the European Central Bank last week raised rates for the first time in almost three years, with President Christine Lagarde warning inflation triggered by the Iran war is widening beyond just energy.“We’re closely watching how Warsh frames the balance between growth and inflation and any changes Warsh signals on Fed communication, such as reducing reliance on forward guidance to signal how it might act on policy rates next,” BlackRock Investment Institute strategists including Jean Boivin and Wei Li wrote in a report. “That potentially makes the Fed’s policy changes a source of volatility as investors try to infer future moves from fewer clues.”Separately, data on Tuesday showed China’s consumer spending contracted for the first time since the pandemic while investment deteriorated, exposing risks still facing the economy even as it benefits from booming exports and a deescalation in tensions around Iran. The nation’s home prices also fell at a quicker pace in May.Corporate Highlights:Taxi-hailing app provider Go Inc.’s shares surged 21% in its trading debut on the Tokyo Stock Exchange on Tuesday, helping to support investor sentiment after the nation’s largest initial public offering so far this year. AIA Ltd. and Prudential Plc have created new jobs in Hong Kong in a bid to win business from the region’s richest people, part of a broader push among insurers to grow revenues from wealthy clients. Larry Fink is embracing a quieter, continual cycle of rightsizing, as the world’s largest asset manager embarks on its latest round of job cuts. Anthropic PBC is seeking to resolve a fresh confrontation with the Trump administration over artificial intelligence security that prompted the company to disable global access to its two most advanced AI models. SpaceX shares jumped in their second day of trading, adding to gains following a blockbuster debut that instantly vaulted it into the ranks of the world’s most valuable public companies. Jardine Matheson Holdings Ltd. will buy back $500 million of its own shares by the end of next year as the Hong Kong company lays out targets for its transformation from a long-term owner-operator into an active investor more akin to a private equity fund. Some of the main moves in markets:StocksS&P 500 futures were little changed as of 1:23 p.m. Tokyo time Japan’s Topix fell 0.3% Australia’s S&P/ASX 200 fell 0.2% Hong Kong’s Hang Seng fell 1.2% The Shanghai Composite was little changed Euro Stoxx 50 futures were little changed CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1579 The Japanese yen was little changed at 160.29 per dollar The offshore yuan was little changed at 6.7619 per dollar CryptocurrenciesBitcoin fell 0.7% to $66,008.38 Ether fell 2.5% to $1,771.55 BondsThe yield on 10-year Treasuries was little changed at 4.48% Japan’s 10-year yield advanced five basis points to 2.625% Australia’s 10-year yield advanced five basis points to 4.86% CommoditiesWest Texas Intermediate crude fell 0.1% to $80.65 a barrel Spot gold rose 0.3% to $4,326.13 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Rob Verdonck, Matthew Burgess, Ruth Carson, Bing Hong Lok and Aya Wagatsuma.©2026 Bloomberg L.P.