The Market Anticipates Powell's Debut, Interest Rate Decision, and Press Conference as Key Focus

June 17: The Federal Reserve’s first interest rate decision under new Chair Kevin Warsh will be announced at 2 a.m. Beijing time on June 18, with a follow-up press conference scheduled for 2:30 a.m. Beijing time. Markets are nearly uniform in their expectation that the Fed will hold the federal funds rate steady in the 3.50%-3.75% range. Over the past few days, U.S. equities have stayed firm, led by gains in tech and cyclical sectors. The Dow notched a new all-time high, while the S&P 500 retained its broader resilience. Though the Nasdaq saw swingy trading as AI, semiconductor, and software names took profits, there’s no sign of systemic market stress. Goldman Sachs’ trading desk noted that semiconductor and AI infrastructure stocks have held relatively flat this week after recent volatility, with investors still sticking to "buy-the-dip" strategies. AI trades remain the market’s most crowded and divisive theme. SpaceX’s post-listing rally has stoked optimism around the next generation of AI infrastructure, while storage, optical modules, CPOs, power equipment, and data center supply chains keep drawing support from expectations of rising cloud capital expenditure. That said, some investors are warning AI-related trades have already run up big and will need solid fundamentals to sustain their momentum. On the geopolitical front, markets are processing a handful of positive signals. Optimism around U.S.-Iran talks and eased concerns over Strait of Hormuz access has pushed down the oil risk premium. Meanwhile, Trump’s ongoing push for a Russia-Ukraine ceasefire has cut into safe-haven trades. Crude prices have pulled back from recent highs, easing fears of a fresh inflation surge. Crypto assets have also benefited from improved risk appetite. Bitcoin and Ethereum have both bounced back lately, with the market framing the moves as a continuation of better liquidity expectations and revived speculative sentiment. Ethereum has held up well after prior pressure, while Bitcoin is widely seen as a core gauge of macro risk appetite. Against this backdrop, Warsh’s debut appearance is the key short-term market focus. While the consensus is for the Fed to hold rates steady, investors are laser-focused on the FOMC statement wording and the tone of Warsh’s post-meeting press conference. If Warsh downplays rate cut expectations and emphasizes lingering inflation risks, it could weigh on overvalued tech and AI trades. If he signals a dovish shift, it would give recent rebounds in risk assets fresh fuel.