Iran Deal, Hawkish Fed Drive Market Rebound

Araverus Team|Thursday, June 18, 2026 at 8:15 AM

Araverus Team

Jun 18, 2026 · 8:15 AM

Commodities · Equities · Geopolitics · Monetary Policy

Commodities Equities Geopolitics Monetary Policy

U.S. Treasurys and stock futures rebounded in early European trading, while Brent crude oil slid 2.3% to $77.71 a barrel, as investors reacted to a U.S.-Iran agreement to end conflict and Federal Reserve Chair Kevin Warsh's hawkish debut, which saw the 10-year Treasury yield slip 1.6 basis points to 4.446%.

Warsh's stance, emphasizing an "unambiguously and unanimously" committed Fed to a 2% inflation target, raised investor expectations for a policy rate hike later this year, with nine of 19 officials penciling in at least one rate rise. Concurrently, President Trump's unexpected signing of a memorandum of understanding with Iran to reopen the Strait of Hormuz boosted sentiment, causing WTI crude to fall 2.5% to $74.08 a barrel, with both benchmarks down roughly 15% this week.

U.S. stock futures rose across major indexes, including the S&P 500 up 0.8%, Dow Jones Industrial Average up 0.5%, and Nasdaq up 1.4%. Asian markets were mixed, with South Korean Kospi climbing 2.25% to a record 9063.84 and Japanese Nikkei Stock Average rising 1.6% to an all-time high of 71053.49, while Hong Kong's Hang Seng Index slumped 2%.

The dollar held higher, reaching an 11-week high against a basket of currencies, and gold prices fell 1.2% to $4,328.20 a troy ounce due to higher interest rate expectations. Goldman Sachs' David Mericle noted the Fed meeting raises rate hike risk but maintains a base case of unchanged policy rates this year.