[New York Stock Briefing] Mixed Amid Monetary Policy and Middle East Uncertainty…Coinbase Up 16%

The major indices on the New York Stock Exchange closed with mixed results. At the Federal Reserve's Federal Open Market Committee (FOMC), the benchmark interest rate was kept unchanged as expected, but uncertainty increased as Jerome Powell, the Chair of the Fed, failed to provide a clear direction for future policy. Uncertainty in the Middle East is also ongoing.

On the 18th (local time) at the New York Stock Exchange (NYSE), near the market close, the Dow Jones 30 Industrial Average ended at 42,171.66, down 44.14 points (0.10%) from the previous day; the Standard & Poor's (S&P) 500 Index finished at 5,980.87, down 1.85 points (0.03%); and the Nasdaq Composite Index closed at 19,546.27, up 25.18 points (0.13%).

Earlier in the session, the main indices' gains narrowed and then turned negative, following Jerome Powell's press conference after the conclusion of the Fed's June FOMC regular meeting. As expected, the benchmark rate was kept on hold and the Fed’s dot plot maintained an outlook of two rate cuts this year, but at the press conference, Powell failed to provide clear explanations regarding the impact of tariffs.

Powell commented, "It is very difficult to predict the impact of tariffs," adding, "Some of the tariff effects are beginning to appear, and we will learn more by summer." He further said, "No one has great confidence in the rate path described in the dot plot," and "As projections further out are harder to make, I will focus more on the nearer-term rate outlook."

The contents of the economic outlook report released by the Fed raised concerns of 'stagflation'—inflation persisting despite economic slowdown. According to Sang-Young Seo, analyst at Mirae Asset Securities, this year’s U.S. GDP growth forecast was lowered from 1.7% to 1.4%, while the core personal consumption expenditure (PCE) inflation forecast was raised from 2.8% to 3.1%, and next year’s policy rate forecast was raised from 3.4% to 3.6%.

He stated, "(The Fed’s economic outlook) mainly showed that inflationary pressure is persistent and the economic outlook remains uncertain," and, "The financial market saw a weaker dollar and falling rates, but volatility increased with the adjustment of next year’s rate forecast."

There is also continued uncertainty as to whether the United States will intervene in the conflict in the Middle East. Donald Trump, President of the United States, said that no final decision had yet been made about bombing Iran’s nuclear facilities and that the possibility of negotiations with Iran remains open.

On this day at the New York Stock Exchange, Coinbase, a cryptocurrency-related stock, surged 16.32%. This came as the U.S. Senate passed the ‘Genius (GENIUS)’ bill regulating stablecoins. Bringing cryptocurrency under the scope of laws and regulations was seen as a positive.

As a result, credit card companies Visa Card and Mastercard both fell more than 5%.

Among major tech stocks, Alphabet and Amazon both fell over 1%.

According to the FedWatch Tool of the Chicago Mercantile Exchange (CME), the federal funds futures market reflected as high as an 89.7% probability that the benchmark interest rate will remain unchanged after the FOMC meeting in July.

The CBOE Volatility Index (VIX) at the Chicago Board Options Exchange showed 20.14, down 1.46 points (6.76%).

Kyung-Woo Han, Hankyung.com reporter case@hankyung.com