Stocks Pause Near Records Ahead of First Warsh Fed Decision – US Market Wrap

A rally that had pushed US equities to the doorstep of fresh record highs paused as investors looked ahead to the first Federal Reserve policy decision under Chair Kevin Warsh. Falling oil prices helped support bonds, driving yields lower.

A rotation away from technology continued, with semiconductor stocks coming under pressure after their recent strong run. The weakness weighed on broader indexes, sending the S&P 500 modestly lower and the Nasdaq 100 down about 2%. In contrast, economically sensitive sectors held up well, helping the Dow Jones Industrial Average reach another record high. Oil fell below $80 a barrel as traders anticipated a recovery in global supplies.

Markets are also focused on the upcoming signing of an interim peace agreement between the US and Iran, with investors looking for guidance from policymakers on how the conflict and subsequent decline in energy prices may affect the economic outlook. While the Bank of Japan is expected to continue tightening policy, most major central banks, including the Federal Reserve, are widely expected to leave rates unchanged this week.

Attention is now turning to how the Warsh-led Fed will communicate its policy outlook. Investors are particularly focused on whether any changes will be made to the Summary of Economic Projections and the closely watched dot plot, which provides policymakers’ expectations for future interest rates.

Elsewhere, a renewed surge in SpaceX valuation pushed the company within striking distance of Amazon’s market value, highlighting continued investor enthusiasm for growth-oriented assets despite the rotation away from parts of the AI trade.