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June 17, 2026 - 10:08
4 minutes
(Bloomberg) — US stock futures and bonds climbed as oil fell further, with investors awaiting the Federal Reserve’s policy decision for fresh clues on the outlook for global interest rates.Nasdaq 100 futures rose 0.8%, signaling a rebound after a pullback in chip stocks dragged US equities lower Tuesday. Contracts on the S&P 500 gained 0.3%. European stocks were steady. BMW AG fell 11% after the company slashed its profitability forecast for the year and ramped up its cost-cutting program, warning of worsening demand in China.Brent crude fell below $79 a barrel to a fresh three-month low. Prices slumped 15% over the last four sessions on bets the US-Iran deal to reopen the Strait of Hormuz will unleash a wave of supply and help ease concerns over inflation. That has prompted investors to reassess the global rates outlook just as the Fed convenes for the first time under Chairman Kevin Warsh.“The backdrop has actually tilted more dovish over the past 48 hours, with oil falling sharply on Hormuz reopening expectations, providing a real disinflationary impulse,” said Billy Leung, an investment strategist at Global X Management.In the UK, traders reduced the extent of Bank of England rate hikes priced for this year after inflation unexpectedly held steady in May. The figures appear to support the wait-and-see approach favored by some BOE rate-setters before Thursday’s policy decision.The Fed’s near-term rate path is stirring debate and conflicting bets from cuts to various degrees of hikes over the coming months. Policy forecasts from Wall Street strategists also run the gamut. US asset manager PGIM this week said the Fed will raise rates three times this year, while Citigroup Inc.’s Andrew Hollenhorst has said the central bank will cut rates this year. BNP’s recent call is for three rate hikes starting in December.The case for more dovish policy got some support from the bond market, with 10-year Treasury yields dipping one basis point to hold near a one-month low. Yields on benchmark bonds also dropped in Europe and Asia.Bloomberg Economics sees a shift in how the Fed communicates with markets as Warsh is unlikely to submit his own “dot” to the closely scrutinized dot plot, breaking with precedent under Jerome Powell, Janet Yellen and Ben Bernanke.“The wild card is going to be whether Warsh goes through with balance sheet reduction and end signaling from the Fed,” said Byron Anderson, head of fixed income at Laffer Tengler Investments, which oversees more than $1.7 billion.On the geopolitical front, the US and Iran are preparing to formally sign a memorandum of understanding on June 19 in Switzerland. Still, many European governments, energy investors and shipping companies have reservations about how fast the Strait of Hormuz can return to pre-war conditions.Elsewhere in markets, a gauge of the dollar was steady while gold held gains after advancing more than 6% over the past four sessions.“The greenback is increasingly reliant on expectations of Fed tightening this year,” ING Groep NV currency strategists including Francesco Pesole wrote in a note to clients. “It therefore needs confirmation that policymakers and especially new Chair Kevin Warsh are seriously open to hikes, even as rates are almost certain to stay on hold today.”Some of the main moves in markets:StocksS&P 500 futures rose 0.3% as of 4:07 a.m. New York time Nasdaq 100 futures rose 0.8% Futures on the Dow Jones Industrial Average were little changed The Stoxx Europe 600 rose 0.1% The MSCI World Index fell 0.4% CurrenciesThe Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1605 The British pound was little changed at $1.3417 The Japanese yen rose 0.2% to 160.12 per dollar CryptocurrenciesBitcoin fell 0.6% to $65,396.05 Ether fell 0.8% to $1,781.99 BondsThe yield on 10-year Treasuries declined one basis point to 4.43% Germany’s 10-year yield was little changed at 2.92% Britain’s 10-year yield declined four basis points to 4.74% CommoditiesWest Texas Intermediate crude fell 0.9% to $75.35 a barrel Spot gold fell 0.1% to $4,326.22 an ounce Brent crude fell 0.8% to $78.35 a barrel This story was produced with the assistance of Bloomberg Automation.©2026 Bloomberg L.P.
