Mid-Morning Look: June 18, 2026

Mid-Morning Look

Thursday, June 18, 2026

Stock market strength remains astounding, with every dip continuing to be bought, erasing all of yesterday’s declines as the signing of the interim US-Iran peace deal on Wednesday overshadows concerns about rising interest rates following yesterday’s FOMC meeting commentary. Stock markets slumped on Wednesday, ending near the lows after the U.S. FOMC held the federal funds rate steady at 3.50%-3.75 as expected, but Summary of Economic Projections (SEP) skewed decidedly hawkish. The median FOMC interest rate forecast for 2026 was upwardly revised to 3.75% (from 3.375%), driven by 9 out of 18 members projecting further tightening ahead, including six who anticipate a 50-bps hike. However, futures jumped overnight and held gains this morning following news that Washington and Tehran have electronically signed an interim accord. The deal, which extends the active Middle East ceasefire by granting key financial concessions to Iran, allowed both countries to spin a domestic victory and provided a major geopolitical sigh of relief for risk assets. Oil prices are lower, while the dollar and short term yields rise.

While stock market strength remains broad based, there is no question that the daily surge in semiconductor stocks (SOX) is doing the bulk of leading in the S&P 500 and Nasdaq, with the PHLX Semi Index (SOX) trading at new all-time highs rising 5.4% around 14,200 as semis continue to lead the charge, up about 100% this year. At the same time, the brief rebound in software names last month is all but gone (IGV), down across the board today with the rotation into semis continuing. Even Mag 7 names have been lagging with MSFT, AMZN, META among names failing to rally with the Nasdaq. Energy stocks have been tumbling (XLE -7% this month) on the decline in oil prices.

The US dollar surges as EUR/USD hit a 2-1/2-month low of 1.1460 in early NY, it traded down -0.34, while the Japanese yen falls to lowest levels since 2024 vs the greenback, raising fears about potential BoJ intervention just days after the Bank of Japan raised interest rates. US/Iran sign agreement to end conflict and reopen Strait of Hormuz; deal entered into force following remote signing by Trump and Iranian leadership, with delegations set to meet in Switzerland on Friday for nuclear talks. June FOMC was clearly hawkish: 9 policymakers projected hikes in ’26 & inflation forecasts were marked up significantly. New Fed Chairman Kevin Warsh leaned hawkish too, emphasizing restoration of price stability.

The Bank of England kept interest rates on hold at 3.75% in June, judging it would be premature to raise rates now given the unclear strength of increased inflation pressures. The Central bank’s Monetary Policy Committee voted 7-2 to keep rates on hold, in line with economists’ expectations in a Reuters poll, after external member Megan Greene joined Chief Economist Huw Pill in calling for a quarter-point rate rise. Also today, the Swiss National Bank left its Benchmark interest rate unchanged, saying its medium-term price outlook had barely changed despite a recent uptick in inflation stoked by higher fuel costs from the Iran war.

Wall Street is bracing for the largest options expiration event in history on Thursday, June 18, with approximately $8.3 trillion in U.S. options exposure set to roll off in a single session, 18% above the previous record of roughly $7.1 trillion set in December 2025. The event carries an unusual wrinkle: what would normally be a third-Friday triple witching has been shifted one day earlier because U.S. markets will be closed Friday, June 19, for the Juneteenth federal holiday.  

• Weekly Jobless Claims fell to 226,000 from 230,000 and in-line with consensus 225,000; the 4-week moving average climbed to 223,250 from 219,250 prior week (previous 219,000); continued claims climbed to 1.810M from 1.786M prior and above consensus 1.795M.

• Semi equipment: the sector continues to see new all-time highs for likes of AMAT, LRCX, KLAC, ONTO, MKSI and others in recent days/weeks. B Riley said today they sees a multi-year Memory Cycle beginning, with AMAT Systems demand tracking above its modeled ICHR levels, and believe revenue could rise over 2x, to ~$1.8B+ in CY28E from $0.850B in CY24. GM expansion looks increasingly structural. Near-term catalysts are MU’s 6/24 print, Samsung’s early-July preliminary Q226, and late-July Sk Hynix/Samsung updates.
• In Brokers & Exchanges: CME was upgraded to Outperform from Market Perform at Keefe Bruyette saying the recent selloff in shares creates an extremely attractive risk/reward, attributing the pullback to perceived perpetual futures risk. KBW says this is overblown in general for exchanges and CME specifically given the company’s low retail exposure and index licenses in equities products. Separately, CME sued the Commodity Futures Trading Commission and its Chairman Michael Selig over the regulator allowing perpetual futures tied to the price of cryptocurrencies.

• HIVE +5%; as Bell Canada, Cohere, Hypertec and BUZZ High Performance Computing (HPC), a subsidiary of HIVE announced a major AI infrastructure deal, marking a significant step forward in the development and deployment of advanced AI workloads on sovereign Canadian infrastructure.
• INTC +7%; shares jump after President Trump said Thursday in a post on Truth Social that AAPL had agreed to partner with Intel to design and manufacture its chips in the U.S.” Intel had reached a preliminary agreement to manufacture some chips for Apple, the WSJ reported in May.
• SWBI +20%; shares surged on better earnings results as Q4 sales rose 26.7% y/y to $178.4M on higher margins of 29.8% vs. 28.8% y/y saying new products were 37.5% of revs, w/sales growth driven by handgun shipments, accounted for more than 80% of total units shipped
• TTWO +4%; shares jumped after Rockstar Games noted on X, “Pre-orders for Grand Theft Auto VI will officially begin on June 25 on digital storefronts and at other select retailers.”
• WPRT +8%; as announces that Cespira, its Joint venture with Volvo Group, and Volvo Group have signed a development agreement to finalize the integration and commercialization of Cespira’s HPDI™ fuel system technology to enable Volvo Group’s 13-litre Engine to run on hydrogen

• KR -6%; posted mixed Q1 results as adj EPS $1.58 misses est. $1.59 but revs $46.1B above the est. $45.45B as Identical Sales without fuel increased 1.0%; Reaffirms identical sales without fuel growth of 1.0% to 2.0%, adjusted FIFO operating profit of $5B to $5.2B, and adj EPS of $5.10-$5.30.
• NVCR -19%; after saying its cancer treatment for newly diagnosed brain tumors did not meet the main goal of a late-stage study.
• PFE -3%; said that finance chief Dave Denton will step down and leave the company on August 15 to take a role in the consumer goods industry. Pfizer named Cecile Guegan, senior vice president of finance for its global biopharmaceutical business, as interim CFO, effective August 16.
• SPCX -5%; after ending Wednesday down 5% — the first time the rocket and artificial-intelligence company has closed in the red since its trading debut Friday.