SpaceX Surges, Markets Brace for Warsh’s Fed Debut

The EUR/USD pair continues to trade with a constructive bias for the third consecutive session, holding firmly above the 1.1600 level during Wednesday’s Asian trading hours. However, bullish momentum remains cautious as traders await the outcome of the Federal Reserve’s two-day FOMC policy meeting.

The US Dollar remains under pressure amid growing optimism surrounding a potential interim peace agreement between the United States and Iran, reducing demand for safe-haven assets and providing support for EUR/USD. At the same time, the Euro continues to benefit from the European Central Bank’s relatively hawkish stance after delivering its first interest-rate hike in three years. The ECB has also raised its 2026 inflation forecast to 3% amid persistent energy-related pressures and broader price increases across the euro area.

Market participants are still pricing in around 40 basis points of additional ECB rate increases in 2026, even as geopolitical tensions in the Middle East show signs of easing. The US and Iran have reportedly agreed on a preliminary framework aimed at ending the conflict that began earlier in 2026.

Despite the softer tone surrounding the Dollar, expectations that the Federal Reserve could deliver another 25-basis-point rate hike in December are preventing aggressive USD selling and limiting further gains in EUR/USD. As a result, traders are closely watching the Fed’s interest-rate decision, updated economic forecasts, and the latest dot plot for clues about future monetary policy.

Attention will also turn to comments from incoming Fed Chair Kevin Warsh during the post-meeting press conference, as markets seek guidance on the central bank’s outlook for interest rates and the broader direction of US monetary policy.

Gold continues to trade with a subdued tone heading into Wednesday’s European session, although the precious metal remains supported above the $4,300 level as selling pressure lacks momentum.

Recent optimism surrounding a potential interim peace agreement between the United States and Iran has weighed on demand for the safe-haven US Dollar, providing some support for Gold. However, uncertainty remains as conflicting reports have emerged over the agreement’s details.

The Fed is widely expected to keep interest rates unchanged at its upcoming meeting, while markets are watching for signs that policymakers may reduce their previous easing bias as inflation remains more persistent than expected. The updated economic projections, particularly the central bank’s dot plot, will be closely examined for clues about the future rate path.

Investors will also focus on comments from new Fed Chair Kevin Warsh during the post-meeting press conference for further guidance on monetary policy. Meanwhile, markets have started unwinding some of the extreme inflation concerns and hawkish Fed expectations that emerged during the US-Iran conflict.

Despite this shift, traders continue to price in roughly a 60% probability of a 25-basis-point Fed rate hike in December. A more dovish signal from the central bank may be required before traders increase bearish bets on the US Dollar and position for a stronger recovery in Gold from last week’s year-to-date low.

Oil prices extended their decline on Wednesday as investors continued to evaluate the implications of the emerging US-Iran peace agreement. However, uncertainty surrounding the full restoration of shipping activity through the Strait of Hormuz limited further losses and kept traders cautious.

Both benchmarks dropped nearly 5% for a second consecutive session on Tuesday, reaching three-month lows as hopes grew that a diplomatic breakthrough could help restore oil flows through the strategically important waterway.

Under the proposed agreement, the United States would ease restrictions on Iranian ports, while Tehran would allow oil tanker movement through the Strait, which had been effectively disrupted following US and Israeli strikes on February 28. The development has encouraged selling pressure in crude markets, although traders remain reluctant to extend positions until more details of the deal become available. The Strait of Hormuz remains a key focus for energy markets, as approximately one-fifth of global crude oil and liquefied natural gas supplies previously passed through the route before disruptions occurred.

Despite the diplomatic progress, industry participants warn that a complete recovery in Iranian oil production and refining capacity could take weeks, months, or even longer. Additional uncertainty remains due to Israel’s cautious stance toward both the previous ceasefire and the latest US-Iran agreement.

On the supply side, the latest American Petroleum Institute (API) report indicated that US crude inventories declined by 8.3 million barrels in the week ending June 12, exceeding expectations for a 4.6 million-barrel draw. Traders now await official inventory data from the Energy Information Administration (EIA) for further direction.

With geopolitical uncertainty easing but supply risks unresolved, crude prices are likely to remain volatile as markets balance expectations of increased Iranian exports against the pace of any recovery in global oil flows.

US equities closed mixed on Tuesday as the initial optimism surrounding the US-Iran interim peace agreement faded, with investors adopting a more cautious approach while awaiting further details on the deal.

The Federal Reserve’s meeting marks the first policy gathering under new Chair Kevin Warsh. The central bank is widely expected to keep interest rates unchanged while releasing updated economic projections that could provide fresh insight into the future direction of monetary policy.

Technology and energy stocks were among the weakest-performing sectors within the US 500 as investors rotated away from high-growth technology shares and declining oil prices weighed on energy companies. Meanwhile, financials, industrials, and real estate stocks showed strength, reflecting confidence in economic resilience and easing inflation pressures.

Attention now turns to the Federal Reserve’s policy announcement, with markets expecting interest rates to remain unchanged. Investors will focus on updated economic forecasts and comments from Chair Kevin Warsh for clues about the central bank’s future approach.

Among individual stocks, attention remained focused on SpaceX following its strong market debut. After gaining nearly 19% on its first trading day, the company’s shares rose almost 20% on Monday and added another 4.8% on Tuesday.

The rally pushed SpaceX’s market value close to $3 trillion, briefly allowing it to surpass major technology companies such as Amazon and Microsoft in market capitalization rankings.

The company also drew attention after reports that it agreed to acquire an AI coding startup for $60 billion and allocated additional funds toward debt repayment, using a significant portion of the capital raised from its recent listing.