Stocks Steady Amid Middle East Tensions and Fed Caution

Stocks closed little changed on Wednesday as the Federal Reserve maintained interest rates amid ongoing economic uncertainty while investors kept a close eye on the escalating conflict in the Middle East. The Dow Jones Industrial Average fell slightly, the S&P 500 was down fractionally, and the Nasdaq Composite added a slight gain, fluctuating between positive and negative territory after the Fed’s announcement. Concerns over the Israel-Iran conflict and the possibility of a broader conflict loomed following President Trump’s contemplation of a U.S. attack on an Iranian nuclear facility.

Global financial markets experienced volatility since Israel initiated attacks on Iran, leading to retaliatory missile strikes. Tensions between the U.S. and Iran escalated, contributing to market uncertainties. Investor focus shifted to the Federal Reserve’s decision to maintain rates, accompanied by a revised forecast for inflation and economic growth in 2025. The Fed acknowledged reduced economic uncertainty but emphasized the need for additional data on tariff impacts before adjusting rates, signaling a cautious approach.

Tech stocks displayed mixed performance, with Tesla rebounding, chipmakers Nvidia and Broadcom making gains, and companies like Microsoft and Apple posting modest increases. Marvell Technology surged as analysts recognized growth prospects in its Custom AI event, while cryptocurrency exchange Coinbase soared following Senate approval of the GENIUS Act regulating stablecoins. However, payment card giants Mastercard and Visa faced declines as stablecoin rules could impact card-based payment systems.

In the energy sector, oil prices fluctuated amid concerns of supply disruptions due to Middle East conflicts. Gold prices dipped as investors shifted focus from safe-haven assets. Treasury yields remained steady, influencing borrowing costs, and the U.S. dollar index edged higher after a recent low. Meanwhile, U.S. financial markets closed for the Juneteenth holiday, marking a pause in trading activities.

In other market developments, IBM shares hit record highs as analysts projected growth potential in generative AI and quantum computing. U.S. Steel’s acquisition by Nippon Steel raised questions about the iconic “X” ticker symbol on the NYSE, now available after a century. Oppenheimer raised Roblox’s price target, foreseeing increased user growth and retention, and Marvell Technology’s stock surged on positive AI growth prospects. Korn Ferry reported strong earnings, driving a stock jump, while Circle Internet Group and Nucor saw stock increases following legislative and profit forecasts, respectively.

SunRun shares continued to decline due to policy changes impacting solar energy stocks, and major index futures showed minimal changes as markets navigated economic uncertainties and geopolitical tensions. Overall, the market landscape reflected a delicate balance between global events, economic data, and corporate performance shaping investor sentiment and market movements.