US Stocks Likely To Open Higher Despite Trump's 'Unconditional Surrender' Call: All Eyes On Powell As Experts Predict Inflation Will Limit Fed's Rate Cut Capacity

U.S. futures were trading higher on Wednesday as oil futures tumbled after President Donald Trump called for an "Unconditional Surrender" of Iran late Tuesday.

Trump also stated in one of his Truth Social posts that the U.S. knows exactly where Iran's "Supreme Leader" was hiding, highlighting that he was an "easy target.”

Meanwhile, investors expect the Federal Reserve to hold rates steady at 4.25%-4.50% on Wednesday, to “wait and see” the impact of tariffs on the economy.

The 10-year Treasury bond yielded 4.38% and the two-year bond was at 3.94%. The CME Group's FedWatch tool‘s projections show markets pricing a 99.9% likelihood of the Federal Reserve keeping the current interest rates unchanged in its June meeting.

The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, rose in premarket on Wednesday. The SPY was up 0.32% at $599.43, while the QQQ advanced 0.37% to $531.02, according to Benzinga Pro data.

Cues From Last Session:

U.S. stocks ended lower on Tuesday, with energy stocks being the exception, while most S&P 500 sectors declined, led by significant losses in health care, materials, and consumer discretionary stocks.

The Dow Jones index fell approximately 300 points amid heightened geopolitical concerns following an Axios News report that President Trump will convene with his national security team in the White House Situation Room to address the intensifying Israel-Iran conflict.

In stock-specific news, Jabil Inc. JBL outperformed with stronger-than-expected third-quarter earnings. CERo Therapeutics Holdings Inc. CERO surged 189% after securing FDA Orphan Drug Designation for CER-1236 in treating acute myeloid leukemia.

On the economic front, U.S. retail sales dropped 0.9% month-over-month in May, worse than the anticipated 0.7% decline. U.S. import prices remained flat in May, while export prices fell 0.9%. U.S. industrial production also disappointed, declining 0.2% in May against expectations of a 0.1% increase.

The Dow Jones index ended 299 points or 0.70% lower at 42,215.80, whereas the S&P 500 index fell 0.84% to 5,982.72. Nasdaq Composite declined 0.91% to 19,521.09, and the small-cap gauge, Russell 2000, tumbled 1.04% to end at 2,101.96.

Insights From Analysts:

Analysts at BlackRock stated that uncertainty around the economic impact of tariffs and inflation volatility will keep the “Fed on hold for now.”

“Longer term, persistent inflation pressures from tariffs and a tight labor market will likely limit how far the Fed can cut, even if tariff-driven supply disruptions dent growth,” the BlackRock note stated.

Analysts also anticipated that long-term U.S. bond yields can rise, keeping them “underweight.” BlackRock reiterated that it preferred inflation-linked bonds, “even if they are yet to reflect long-term inflation pressures.”

“We favor infrastructure equity, like stakes in airports and data centers: its returns are buffered from inflation and it outperforms amid supply constraints and high inflation. Private markets are complex and not suitable for all investors,” said the note.

Tariffs and any sustained oil price rises from the Israel-Iran conflict could leave other central banks facing weaker global growth, explained experts. “Should the conflict affect the security of critical trade routes, supply disruptions could add to inflation pressures,” it added.

“We think the Fed will keep rates steady as it waits for tariff impacts to materialize. Mega forces keep us overweight U.S. stocks.”

Ed Yardeni highlighted the latest Summary of Economic Projections, which will be released later today, along with the Fed’s decision on interest rates.

“Odds are that its median economic forecasts will show slow economic growth with a slight increase in the unemployment rate and a modest short-term uptick in inflation–all mostly consequences of President Donald Trump’s tariffs and now the war between Israel and Iran,” he said.

Add that “the SEP is likely to signal a couple of small cuts in the federal funds rate in the coming months. But Powell will certainly reiterate that the FOMC is in no hurry to do so.”

See Also: How to Trade Futures

Upcoming Economic Data

Here’s what investors will keep an eye on Wednesday:

• May’s housing starts data, building permits data, and the initial jobless claims data for the latest week will be out by 8:3 a.m. ET.
• The Federal Open Market Committee will announce its interest-rate decision at 2:00 p.m. ET.
• Federal Reserve Chairman Jerome Powell will address a press conference at 2:30 p.m. ET.
• On Thursday, markets will remain closed on account of the Juneteenth holiday.

Stocks In Focus:

• Korn Ferry KFY was up 0.37% in premarket on Wednesday as analysts expect it to report quarterly earnings of $1.26 per share on revenue of $689.90 million, before the opening bell.
• GMS Inc. GMS was unchanged at 0.10% ahead of its earnings, which are supposed to be released before the opening bell. Analysts expect earnings of $1.11 per share on revenue of $1.30 billion.
• Euroseas Ltd. ESEA advanced 2.58% as analysts expect it to report quarterly earnings of $3.28 per share on revenue of $52.91 million, after the closing bell.
• Beyond Air Inc. XAIR dropped 21.33% after posting mixed fourth-quarter results. Quarterly revenue came in at $1.15 million, which missed the Street estimate of $1.39 million.
• Bitdeer Technologies Group BTDR was 2.44% lower after it reported a $300 million proposed private placement of Convertible Senior Notes.
• Ryde Group Ltd. RYDE jumped 12.81% as it announced the acquisition of a strategic 40% shareholding in Atoll Discovery Pte. Ltd. (“Atoll”), a Singapore-based electric vehicle rental company.
• PTL Ltd. PTLE surged 108.74% after approving a dual-class share structure on June 16, 2025. Shareholders also approved share consolidation and related amendments.
• Focus Impact BH3 Acquisition Co. SAFX zoomed 57.06% after appointing a new six-member Board of Directors after its Nasdaq listing and business combination.
• GlycoMimetics Inc. CBIO slumped 59.38% after Crescent Biopharma completed its merger with the firm and closed a $200 million private placement led by prominent healthcare investors.
• Biomea Fusion Inc. BMEA plummeted 26.21% after announcing a proposed public offering of common stock and warrants

Commodities, Gold, And Global Equity Markets:

Crude oil futures were trading lower in the early New York session by 1.05% to hover around $72.50 per barrel.

Gold Spot US Dollar fell 0.24% to hover around $3,380.62 per ounce. Its last record high stood at $3,500.33 per ounce. The U.S. Dollar Index spot was lower by 0.17% at the 98.6510 level.

Asian markets ended on a mixed note on Wednesday as China’s CSI 300, South Korea's Kospi, and Japan's Nikkei 225 indices rose. While Hong Kong's Hang Seng, Australia's ASX 200, and India's S&P BSE Sensex indices declined. European markets were flat in early trade.

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