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June 18, 2026 - 03:10
7 minutes
(Bloomberg) — US stock futures rallied while oil prices extended a recent slump as President Donald Trump signed an interim deal to end the war with Iran and reopen the Strait of Hormuz.Contracts on the S&P 500 climbed 0.8% while Nasdaq futures jumped more than 1%. The moves followed a 1.2% drop in the US benchmark on Wednesday after the Federal Reserve signaled rates may need to rise further to contain inflation. Brent crude fell almost 1% early in Asia trading, dropping below $79 a barrel. A gauge of Asian stocks rose 0.5% in a fifth day of gains while Japan’s Nikkei 225 jumped more than 1.5%.“The positive surprise for equities came from Trump’s signing of the Memorandum of Understanding with Iran,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management. “While markets had already been pricing a gradual normalization of shipping through the Strait of Hormuz, there had remained a meaningful risk of a last-minute collapse in negotiations. The agreement substantially reduces that tail risk.”Trump told reporters he signed the document at the palace of Versailles near Paris, where he had dinner with French President Emmanuel Macron. The so-called memorandum of understanding is now in effect, a US official said. However, it was unclear if Iran had immediately begun taking steps to fully reopen the Strait of Hormuz.The yield on 10-year Treasuries fell two basis points to 4.47% after rising about five basis points on Wednesday following the Fed decision. Two-year Treasury yields, which are highly sensitive to Fed policy expectations, retreated one basis point to 4.17% after jumping 13 basis points in the previous session. Yields on Australian and Japanese bonds climbed early on Thursday.Roughly half of Fed policymakers projected rate hikes this year, prompting traders to fully price in an increase by October and see a strong chance of a move as soon as September. Chairman Kevin Warsh, in his first press conference as head of the central bank, declined to offer guidance on the next policy move. He emphasized that inflation has remained above the Fed’s 2% target for several years and reiterated the central bank’s commitment to restoring price stability.“Half the committee is expecting rate hikes this year, which is a real shot across the bow at the market,” said Bob Michele, chief investment officer and global head of fixed income at JPMorgan Asset Management. “I think they’re getting ready for rate hikes.”Central banks in Indonesia and the Philippines — two economies hit hard by the steep increase in global oil prices following the Iran war — are both expected to raise their policy rates by a quarter-point each on Thursday, according to the majority of economists surveyed by Bloomberg.Elsewhere in markets, the yen fell to its weakest level against the US dollar since July 2024, raising the risk of official intervention.Investors remain concerned the Bank of Japan is not tightening policy quickly enough to contain inflation and stabilize the yen, even after it raised its benchmark rate to the highest level since 1995 earlier this week. Deputy Governor Shinichi Uchida said the exchange rate is important to the economic outlook but is not a direct policy target.The Bloomberg Dollar Spot Index slipped 0.1% after climbing 0.7% in the last session. Gold and silver advanced.In private credit, an Oaktree Capital Management fund saw redemption requests drop by nearly half in the second quarter, making it the first major firm to stem a growing exodus from the $1.8 trillion industry.The Fed decision marked the fourth consecutive meeting in which policymakers left rates unchanged. Officials described economic growth as “solid” and highlighted strong productivity gains and capital investment, while making clear that inflation has become a greater concern than labor-market weakness.“The Fed’s recent hawkish shift was not just about higher energy prices,” said Kay Haigh at Goldman Sachs Asset Management. “Despite the recent pullback in oil, half of the members of the FOMC expect rate hikes as soon as this year, reflecting strong labor market and inflation data.”Warsh also announced the creation of a task force to review the Fed’s $6.7 trillion balance sheet, an issue he has long criticized. The group would examine whether “monetary policy is coming from our interest rate tool or our balance sheet tool,” he said.“The Fed’s hawkish tone still hurts, but the sharp drop in oil prices helps counter the renewed inflation scare and gives investors room to push back against the higher-rate narrative,” said Hebe Chen, a senior market analyst at Vantage Global Prime.Corporate Highlights:National Stock Exchange of India Ltd., the operator of the world’s busiest derivatives market, has filed draft documents for what’s on track to be one of the largest initial public offerings in India’s history. Blue Origin is already rebuilding the Florida launch site where its New Glenn rocket exploded last month, making way for the space company to fly again this year and rejuvenate its ambitions to challenge SpaceX. CME Group Inc. Chief Executive Officer Terry Duffy is handing over the reins after more than 25 years at the world’s largest derivatives exchange. He will step down on March 1 and transition to executive chairman. Chief Financial Officer Lynne Fitzpatrick will take over as CEO. La-Z-Boy Inc. jumped after the home furniture store’s reported adjusted earnings per share for the fourth quarter beat the average analyst estimate. UniQure NV soared after the company announced it will be able to seek US approval for its Huntington’s disease gene therapy before conducting a new study. Some of the main moves in markets:StocksS&P 500 futures rose 0.9% as of 10:04 a.m. Tokyo time Hang Seng futures fell 0.3% Japan’s Topix rose 1.4% Australia’s S&P/ASX 200 fell 0.3% Euro Stoxx 50 futures fell 0.5% CurrenciesThe Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1518 The Japanese yen was little changed at 160.68 per dollar The offshore yuan was little changed at 6.7714 per dollar The Australian dollar rose 0.2% to $0.7028 CryptocurrenciesBitcoin rose 0.3% to $64,583 Ether rose 0.6% to $1,756.92 BondsThe yield on 10-year Treasuries declined two basis points to 4.47% Japan’s 10-year yield advanced two basis points to 2.615% Australia’s 10-year yield advanced three basis points to 4.79% CommoditiesWest Texas Intermediate crude fell 1.1% to $75.93 a barrel Spot gold rose 1.6% to $4,324.49 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Aya Wagatsuma and Abhishek Vishnoi.©2026 Bloomberg L.P.
