US stock closed lower after the Federal Reserve held interest rates unchanged and signaled the possibility of rate hikes this year. The S&P 500 fell 1.2% and the Nasdaq 100 dropped 1%, while the Dow lost 507 points from its record high. The Summary of Economic Projections from the Fed's June meeting showed that half of the FOMC members projected one rate hike or more this year, as underlying inflation gauges pointed to rising prices and employment data remained robust despite economic shocks stemming from the war in Iran. Chairman Warsh refrained from posting a dot in the projections, reflecting his intention to change the Fed's monetary framework. Meanwhile, Iran and the US remained on track to sign their agreement. Magnificent Seven stocks led the losses amid the selloff in Treasuries, with Meta down 4.2%, Microsoft losing 3.6%, Alphabet shedding 2.4%, and Amazon dropping 3.1%. Chipmakers extended their rally, with Micron up 2.2%, Marvell gaining 3.9%, and Intel advancing 3.5%.

Retail sales in the US increased 0.9% mom in May 2026, higher than a downwardly revised 0.4% rise in April and above forecasts of 0.5%, signalling a robust consumer spending. Sales increased the most in gasoline stations (3.4%) as gas prices continued to rise due to the war with Iran. The data is not adjusted for inflation. Excluding gas stations, sales rose a firm 0.7%, led by miscellaneous store retailers (2.3%); nonstore retailers (1.5%); autos (1.2%); furniture stores (1%); health (0.6%); general merchandise stores (0.4%); sporting goods, hobby, musical instrument (0.3%); and clothing (0.3%). In contrast, retail sales flattened for building material & garden equipment, food and beverages stores and declined for food services and drinking places (-0.1%) and electronics & appliance stores (-0.5%). Meanwhile, sales excluding food services, auto dealers, building materials stores and gasoline stations, which are used to calculate GDP, were up 0.7%, following a 0.5% gain in April.

The dollar Index rose above 100.3 on Wednesday, the highest since March, as traders digested the latest FOMC decision. The Federal Reserve left interest rates unchanged, as widely expected, in Kevin Warsh’s first meeting as Fed Chair. However, policymakers’ projections were interpreted as more hawkish than anticipated, with roughly half of FOMC members expecting at least one rate hike this year. The Fed also sharply revised upward its inflation forecasts. The 2026 PCE inflation projection was raised to 3.6% from 2.7% in the March forecast, while core PCE inflation is now expected to reach 3.3%, up from 2.7% previously. Traders have now fully priced in a quarter-point Fed rate hike by the end of the year. Meanwhile, Chair Warsh announced changes to the Fed, including five task forces that will address the central bank’s communications, its balance sheet and other issues. The greenback strengthened broadly, posting its largest gains against the British pound and the euro.

US pending home sales surged 3.8% month-over-month in May 2026, following a downwardly revised 0.3% rise in April and exceeding market expectations of 0.8%. This marked the steepest monthly increase since September 2024, with gains across all regions: Northeast (+8.7%), Midwest (+8.1%), South (+1.0%), and West (+0.7%). Year-over-year, pending home sales rose 4.8%. NAR Chief Economist Dr. Lawrence Yun noted that a late spring buyer rush, even with mortgage rates holding steady above 6%, signals pent-up housing demand and growing acceptance of higher rates as the new normal. “The inventory-constrained Northeast region, which has seen faster home price growth but slower home sales for several months, is now showing more buyer contract signings. More supply is needed to help moderate home price growth,” he added.

Crude oil rose more than 1.5% to above $77 per barrel on Wednesday after US President Donald Trump warned that bombing of Iran could resume if Tehran failed to “behave,” raising fresh uncertainty over a potential ceasefire deal. Trump said the memorandum of understanding with Iran was not final, adding that military action remained possible. The US-Iran memorandum, which extends a fragile ceasefire by 60 days, could allow talks toward a lasting truce and help rebuild depleted inventories. Still, industry officials said a full recovery in Iranian production and refining capacity could take weeks, months or even years, limiting the speed of any supply rebound. Nevertheless, oil prices remained near three-month lows, however, as the International Energy Agency warned of a looming supply surplus. In its first outlook for 2027, the IEA said global oil supply could rise by 8 million barrels a day while demand grows by only 2 million bpd, creating significant oversupply.

South Africa's annual inflation rate rose for the third month to 4.5% in May 2026, marking the steepest since July 2024, though below the expected 4.7%. Inflation was mainly driven by transportation (9.4% vs 4.9% in April) and housing & utilities (5.3% vs 5.2%), reflecting pass-through from higher fuel costs due to the Middle East conflict and Eskom’s recent electricity tariff hike. Additional upward pressure came from insurance and financial services (5.7% vs 5.7%) and restaurants & hotels (5.8% vs 5.2%). Meanwhile, food inflation continued to ease (1.9% vs 2.9%). The core inflation rate, which excludes prices of food, non-alcoholic beverages, fuel, and energy, rose to an over 1-1/2-year high of 3.8% in May, up from 3.6% in the previous month. Monthly, the CPI rose by 0.7% in May, down from a 1.1% increase in the prior month.