Markets Gain on Peace Hopes
Wall Street stocks rally, led by tech, as Middle East peace hopes outweigh Fed concerns.
Wall Street bounced back on Thursday, erasing most of Wednesday's sharp losses. The S&P 500 climbed 0.91% to 7,487.36, the Nasdaq jumped 1.49% to 26,410.62, and the Dow edged up 0.15% to 51,571.85, according to Investing.com.
Two forces drove the rebound. Optimism over a new US-Iran peace deal lifted spirits across markets. But investors also had to digest a "hawkish surprise" from the Federal Reserve's new chair, Kevin Warsh, who signaled possible rate hikes as soon as September, Reuters reported.
US-Iran Peace Deal Reopens Oil Flows
On June 14, President Trump and Iranian President Masoud Pezeshkian signed a 14-point peace agreement at the Palace of Versailles. The deal ended a military conflict that had been raging since late February 2026. French President Emmanuel Macron also signed the framework, Barchart reported.
The agreement reopened the Strait of Hormuz, a key shipping lane for about 20% of the world's oil. Brent crude fell to $78.41 per barrel — down from a war-time high of $120. Analyst Chris Beauchamp of IG said the deal "slays the inflation dragon" that had hurt markets for months, according to Trustnet.
New Fed Chair Warsh Rattles Markets With Hawkish Debut
On Wednesday, Kevin Warsh held his first press conference as Fed Chair. He kept rates steady at 3.50%–3.75%, but stripped out "forward guidance" — the language the Fed usually uses to hint at future moves. The policy statement was just 114 words, the shortest since 2007, TheStreet reported.
Warsh said "getting monetary policy right is our North Star." Markets did not like the uncertainty. The Nasdaq dropped 1.15% on Wednesday. By Thursday, CME FedWatch data showed the odds of a September rate hike jumped from 27% to 64%, according to PIMCO.
Tech Stocks Lead Recovery on Apple-Intel Chip Deal
Technology stocks led Thursday's gains. A big reason: President Trump announced that Apple agreed to partner with Intel to design and make chips exclusively in the US. Intel shares surged 9.3% on the news, Reuters reported.
The deal points to a broader shift toward "reshoring" — bringing manufacturing back to the US. Even so, tech stocks remain sensitive to Fed moves. Nine of 18 Fed officials now favor at least one rate hike in 2026, and six support two or more hikes, according to TradingKey.
Trump Clashes With His Own Fed Pick Over Rate Cuts
Trump hand-picked Warsh, expecting a more reform-minded Fed. But Warsh's hawkish turn caught the White House off guard. April's PCE inflation reading came in at 3.8%, with May forecasts hitting 4.1% — well above the Fed's 2% target, according to RSM.
Trump brushed off the lack of rate cuts, saying: "It's alright. Whatever... It just keeps a country down," Business Insider reported. Economist Mohamed El-Erian praised Warsh as a "reform-oriented breath of fresh air," but the tension between the White House and its chosen Fed Chair looks set to grow.
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