Fed hawkish hint roils markets as 2026 rate hikes loom

After the Fed’s first meeting led by new chair Kevin Warsh, policymakers’ dot plot suggested rate hikes could come in 2026 even though rates stayed at 3.5%–3.75%. Stocks sold off, with the Dow about 507 points lower (-0.98%), the S&P 500 down ~1.21%, and the Nasdaq ~1.34% lower, as bond yields jumped (2-year yield near 4.22%). Despite the hawkish tone, stock futures ticked higher overnight and Asia opened mixed, with Nikkei and Kospi hitting new records. Attention now shifts to earnings from Accenture and Kroger, plus May indicators, the Philadelphia Fed index, and initial jobless claims.