Stocks Fall Before Fed, AI Earnings as Oil Climbs: Markets Wrap
(Bloomberg) — Wall Street traders gearing up for the Federal Reserve decision sent stocks lower as oil jumped, with the market also bracing for results from two of the biggest artificial-intelligence spenders.
A resurgence in Middle East violence drove Brent crude to around $90, stoking concerns about inflation, lifting bond yields and dimming the appetite for riskier assets. Another selloff in chipmakers dragged down the S&P 500. Meantime, Microsoft Corp. and Meta Platforms Inc.’s upcoming earnings will test investors’ diminishing patience for massive AI investments.
President Donald Trump told Fox News the US would hit Iran hard after a recent attack that targeted a military base in Jordan. The latest clashes underscore how far Washington and Tehran are from formally restarting peace negotiations, let alone agreeing a deal to permanently end their war and reopen the Strait of Hormuz.
The strikes also added more uncertainty to the outlook for monetary policy. The Fed is expected to hold interest rates steady when it concludes its two-day meeting Wednesday, but traders are eyeing the possibility of a surprise hike as patience with high inflation wears thin.
“While we don’t expect the Fed to hike interest rates on Wednesday, we expect to hear a continuation of the Fed’s direct and unambiguous stance that it will not tolerate high inflation,” said Paul Stanley at Arca.
The Fed will release a post-meeting statement at 2 p.m. Wednesday in Washington, and Chairman Kevin Warsh is scheduled to hold his second post-meeting press conference 30 minutes later.
“The focus will turn to the Fed’s rate announcement and Chairman Warsh’s press conference today, but the tech sector is still the most important issue on the docket for investors this summer,” said Matt Maley at Miller Tabak.
Despair and frustration spread across the South Korean retail-investing community as stocks cratered again Wednesday, extending the decline in the nation’s key equity index this month to a record 33%.
The Kospi Index slid as much as 13% in a hectic morning session, triggering a circuit breaker for a second straight day, as disappointing earnings from SK Hynix Inc. worsened already‑jittery sentiment around the AI buildout. Even though the gauge later trimmed declines, it still closed down 6%.
“We still believe that the decline in the chip stocks and the dramatic fall in South Korea’s Kospi are clear warning signs for US investors,” Maley said. “If history is any guide, these developments could be important examples of a canary in the coal mine.”
Corporate Highlights:
Ford Motor Co. raised its profit outlook for the second time this year as consumers continue to snap up the automaker’s high-margin sport-utility vehicles. Procter & Gamble Co. gave a conservative outlook for its current fiscal year and results in the latest quarter fell short of estimates, highlighting the challenges the maker of Downy fabric softener and Febreze air fresheners faces as consumers retrench. Humana Inc. spent more on medical expenses in the second quarter in its insurance segment than Wall Street anticipated, the latest worrying sign for an industry managing increasing costs. Biogen Inc. reported quarterly revenue and adjusted earnings that beat analysts’ expectations as sales of newly acquired kidney and eye-disease drugs helped offset declining revenue from multiple sclerosis medicines. Bunge Global SA again raised its full-year profit outlook as demand for biofuels bolsters its soybean processing business amid volatile prices stemming from the war in Iran. Bloom Energy Corp., a fuel-cell maker, posted earnings that were more than double expectations and raised full-year guidance for the second consecutive quarter, a sign of rampant demand from data centers. SK Hynix Inc. earmarked at least $31 billion in capital spending this year after reporting a six-fold surge in quarterly profit, a record outlay that coincides with growing fears about overinvestment in AI capacity. Some of the main moves in markets:
Stocks
The S&P 500 fell 0.5% as of 10:09 a.m. New York time The Nasdaq 100 fell 0.6% The Dow Jones Industrial Average fell 1.3% The Stoxx Europe 600 fell 0.2% The MSCI World Index fell 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1390 The British pound was little changed at $1.3293 The Japanese yen was little changed at 163.76 per dollar Cryptocurrencies
Bitcoin rose 0.9% to $64,420.14 Ether fell 0.7% to $1,903.77 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.62% Germany’s 10-year yield advanced four basis points to 3.14% Britain’s 10-year yield advanced six basis points to 5.01% Commodities
West Texas Intermediate crude rose 6.5% to $84.42 a barrel Spot gold fell 0.7% to $4,001.26 an ounce ©2026 Bloomberg L.P.
