Rich Asplund
6 min read
In This Article:
The S&P 500 Index ($SPX) (SPY) today is up +0.08%, the Dow Jones Industrials Index ($DOWI) (DIA) is down -0.06%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.28%.
The Federal Reserve opted to hold interest rates steady at their current range of 4.25%-4.5% following its latest meeting, despite anticipating higher inflation and slower economic growth; however, the central bank still projects two rate reductions later this year.
President Trump said Iran has reached out about the possibility of negotiations, bolstering hopes the Israel-Iran war will de-escalate. Stocks also found support after US weekly jobless claims fell as expected, and bond yields fell on weaker-than-expected US news on May housing starts and building permits. The 10-year T-note yield is down -2 bp to 4.36%.
Gains in stocks are limited by geopolitical risks as hostilities between Israel and Iran entered a sixth day Tuesday with no signs of easing. An overnight meeting between President Trump and his national security team has bolstered speculation the US is close to joining Israel's attacks on Iran after President Trump called for Iran's "unconditional surrender." The US has announced a meeting today with Pakistan's army chief, a key ally of Iran, to discuss mediation. Iran showed no signs of backing down and reiterated an intention to respond with force if the US were to get directly involved in Israeli attacks.
So far, there's been no closure of the vital Strait of Hormuz that handles about 20% of the world's daily crude shipments, although navigational signals from over 900 vessels moving through the strait have been disrupted due to "extreme jamming" of signals from the Iranian port of Bandar Abbas, which caused a collision of two tankers Tuesday near the Strait of Hormuz.
US MBA mortgage applications fell -2.6% in the week ended June 13, with the purchase mortgage sub-index down -3.0% and the refinancing mortgage sub-index down -2.1%. The average 30-year fixed rate mortgage fell -9 bp to 6.84% from 6.93% the prior week.
US weekly initial unemployment claims fell -5,000 to 245,000, right on expectations.
Today's US housing news was weaker than expected. May housing starts fell -9.8% m/m to a 5-year low of 1.256 million, weaker than expectations of 1.350 million. May building permits, a proxy for future construction, unexpectedly fell -2.0% m/m to a 4-3/4 year low of 1.393 million, weaker than expectations of no change at 1.422 million.
