A rate HIKE is back on the table 📈

Welcome back to the Day Trading newsletter 📈

The Fed held rates steady Wednesday, but new Chair Kevin Warsh's debut still rattled Wall Street. Stocks sold off into the close after the Fed's own forecasts flipped from rate cuts to a possible hike.

It was the worst first "Fed day" for the S&P 500 under a new chair since 1994.

Let’s get into it 👇️ 

🚀 SpaceX agreed to buy AI coding startup Cursor for $60 billion in an all-stock deal, the largest acquisition of a venture-backed startup on record. Disclosed Tuesday in a securities filing, the deal lands just four days after SpaceX's record $75 billion IPO and pushes Elon Musk's company deeper into AI, on a collision course with OpenAI and Anthropic.

🖋️ The U.S. and Iran are set to sign a 14-point memorandum of understanding Friday in Switzerland to extend their ceasefire and reopen the Strait of Hormuz. The accord includes a $300 billion reconstruction plan and 60 days of further talks, though President Trump called it "not final" and threatened to resume strikes. Oil stayed near three-month lows.

🥇 Gold tumbled to around $4,275 an ounce Wednesday as the Fed's hawkish turn lifted yields and the dollar. Gold pays no interest, so it loses appeal when rates look likely to stay high or climb — the metal's recent rally had been built on expectations of falling yields, exactly what the new dot plot called into question.

🔼 The 10-year Treasury yield jumped to about 4.50% and the VIX "fear gauge" climbed 12% as traders braced for higher-for-longer rates. Rising Treasury yields feed directly into mortgage and loan costs, so the move is a headwind for homebuyers and a signal that cheaper borrowing isn't coming as soon as hoped.

🚘️ BMW shares fell nearly 7% to a more-than-five-year low after the automaker cut its 2026 profit outlook. The German carmaker blamed weakening demand in China and disruptions from the Iran war, and now expects pre-tax profit to fall "significantly." The warning dragged rivals Volkswagen and Mercedes-Benz lower too.

🛢️ The U.S. drew down its Strategic Petroleum Reserve by 8.263 million barrels last week (the largest weekly draw on record). With the Strait of Hormuz crisis now in its fourth month, the emergency stockpile has fallen to its lowest level since the 1980s, one reason Washington pushed hard to end the conflict and reopen the world's most important oil chokepoint.

💼 CME Group, the world's largest derivatives exchange, said longtime CEO Terry Duffy will step down on March 1, 2027. President and CFO Lynne Fitzpatrick will take over as the company's first female chief executive. Duffy, who has led CME for more than 25 years, will transition to executive chairman. Shares slipped 2.8% on the news.

💰️ Bitcoin slid below $65,000, dropping to around $63,700 after the Fed's hawkish signal hit risk assets. The token had touched $66,315 earlier Wednesday before reversing, as higher-for-longer rates sapped appetite for speculative bets. Spot Bitcoin ETFs posted about $82 million in net outflows on the day.

The Federal Reserve left its benchmark rate unchanged at 3.50%–3.75% on Wednesday — a third straight hold, and exactly what markets expected.

The shock was in the projections. The Fed's new "dot plot" (the chart showing where each official thinks rates are headed) flipped hawkish: 9 of 18 policymakers now pencil in at least one rate hike this year, with 6 expecting two.

The median forecast for where rates end 2026 jumped to about 3.8%, up from 3.4% back in March, effectively erasing the cuts the Fed had been signaling and replacing them with a quarter-point hike.

New Chair Kevin Warsh, appointed by President Trump, also scrapped the Fed's tradition of "forward guidance," telling reporters, "I can't give you any guidance on what we're going to do next."

For months, the story was when the Fed would cut and make borrowing cheaper.

Wednesday flipped that script.

Stickier-than-expected inflation (running above the Fed's 2% target for four straight months, worsened by the Iran-war energy shock) has pushed officials toward higher-for-longer, and possibly higher-from-here.

That hits everyone: pricier mortgages and loans, and pressure on stocks, gold, and crypto, which all do better when money is loose.

Markets reacted fast:

• The S&P 500 fell 1.21% to 7,420.10

• The Nasdaq dropped 1.34%

• The Dow shed about 507 points to 51,492.55

• The 10-year Treasury yield jumped toward 4.50%

• The VIX "fear gauge" rose 12%.

What to watch:

• Warsh's no-guidance stance means markets get fewer hints and more surprises, so expect bigger swings around each inflation report. 

• Traders are now fully pricing in one quarter-point hike by year-end. Watch whether incoming data, especially the next core inflation reading and energy prices tied to the U.S.–Iran deal, make that hike real or let the Fed stand pat.

• Markets are closed Friday for Juneteenth, so positioning into a long weekend could amplify moves.

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⚠️ Disclaimer: Not financial advice. Do your research before making any trades.