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June 18, 2026 - 11:43
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(Bloomberg) — US stocks are staging a rebound after President Donald Trump signed a preliminary deal to end the war in the Middle East, sending Brent crude briefly to its lowest level since the conflict started.S&P 500 futures climbed 0.9% while Nasdaq 100 contracts rallied 1.5%. The moves followed a decline of more than 1% in the US benchmark after Federal Reserve officials signaled they may have to raise interest rates this year to contain inflation.Brent slid 2% to around $78 a barrel. Treasury yields eased as traders pared hawkish bets on US interest rates, even though an October hike remained fully priced in. The dollar extended gains after its biggest advance since April.Trump told reporters he signed the interim deal with Iran at the Palace of Versailles near Paris. In an early sign of the shipping industry responding to the accord, some oil and gas vessels began to cross the Strait of Hormuz, including ships owned by Saudi Arabia’s state tanker giant.Ahead of the last trading day of the week for US markets, the signing of the peace deal is reducing the risk of further energy-supply disruptions. Equities have largely shrugged off the turmoil and continued to notch record highs on the back of relentless enthusiasm for artificial intelligence.Markets have come through the tests posed by the debut of SpaceX, Kevin Warsh’s first meeting as Fed chair and the US-Iran peace deal fairly unscathed, said Raphael Thuin, head of capital market strategies at Tikehau.“With the MOU now signed, there’s reason to believe that we may be close to or past peak inflation,” Thuin said. “The market will be able to concentrate on earnings again, like for Micron next week.”Bond investors, however, face the prospect of lingering risks that may keep the higher-for-longer rates narrative intact. Even though US gasoline prices have dipped below $4 a gallon for the first time since March, energy costs have only been one factor in keeping inflation stubbornly above the Fed’s target.What Bloomberg Strategists Say:“Front end US yields had already been climbing as inflation and activity data surprised to the upside, but Warsh has now effectively given the market the green light to take the move further. That is set to push G10 yields higher, including in economies where growth is already faltering.”— Skylar Montgomery Koning, macro strategist. Click here for the analysis.Wednesday’s 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.“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.”In Europe, short-end bond yields rose to track Wednesday’s US moves. The Bank of England is expected to keep its key rate unchanged later today, with the latest jobs data offering some signs of a turnaround in the labor market. Policymakers in Switzerland and Norway also held interest rates steady.Corporate Highlights:SpaceX shares fluctuated in premarket trading following the previous session’s drop, as it wraps up its first week as a public company following a record-breaking listing. BHP Group said it expects the expansion of its giant Jansen potash mine to cost US$6.9 billion, the latest in a series of cost and time overruns. Credit Agricole SA is considering increasing its stake in Banco BPM SpA as it mulls how to respond to a wave of dealmaking in Italy’s banking sector, according to people familiar with the matter. Tesco Plc’s sales rose less than expected in the fiscal first quarter as the UK’s biggest supermarket grapples with weaker consumer sentiment and a tough comparison with last year. An Oaktree Capital Management private credit 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. StocksThe Stoxx Europe 600 fell 0.4% as of 10:39 a.m. London time S&P 500 futures rose 0.9% Nasdaq 100 futures rose 1.5% Futures on the Dow Jones Industrial Average rose 0.5% The MSCI Asia Pacific Index rose 0.5% The MSCI Emerging Markets Index rose 0.2% CurrenciesThe Bloomberg Dollar Spot Index rose 0.1% The euro fell 0.2% to $1.1480 The Japanese yen was little changed at 160.72 per dollar The offshore yuan was little changed at 6.7712 per dollar The British pound fell 0.4% to $1.3239 CryptocurrenciesBitcoin fell 0.2% to $64,208.34 Ether was little changed at $1,743.96 BondsThe yield on 10-year Treasuries declined four basis points to 4.45% Germany’s 10-year yield was little changed at 2.93% Britain’s 10-year yield was little changed at 4.76% CommoditiesBrent crude fell 2% to $77.95 a barrel Spot gold rose 0.3% to $4,268.70 an ounce This story was produced with the assistance of Bloomberg Automation.–With assistance from Shikhar Balwani and Neil Campling.©2026 Bloomberg L.P.
