FX.co ★ US Futures Fall Further on Juneteenth Holiday

On the Juneteenth holiday Thursday, U.S. stock futures experienced further declines, influenced by escalating geopolitical tensions in the Middle East, which led investors to retreat from riskier assets. The markets also continued to parse the Federal Reserve's Summary of Economic Projections (SEP) for indications of stagflationary threats. The three major stock indices each dropped nearly 1% after Wednesday's stable close. Although the Federal Reserve opted to maintain current interest rates, Federal Reserve Chair Jerome Powell adopted a cautious stance in light of increasing geopolitical and economic uncertainties. He reiterated the Fed's commitment to a data-driven approach, highlighting the ambiguous effects of President Trump's tariffs on inflation and the potential risk of stagflation. The latest Fed projections now suggest two rate cuts in 2025, concurrently revealing reduced growth expectations and forecasts for elevated inflation. Investor sentiment took a further hit due to rising tensions in the Middle East, particularly concerns over the ongoing Israel-Iran conflict, which fueled fears of deeper U.S. involvement. On Wednesday, seven of the 11 sectors in the S&P 500 closed with losses, driven by a slump in the energy sector, while the technology sector fared comparatively better.