Stocks shrug off a hawkish Fed:
a dot-plot flip toward rate hikes couldn't stop the rally - but Bitcoin got left behind
New Fed Chair Kevin Warsh's first meeting delivered a hawkish surprise: the central bank held rates a fourth straight time, but the updated dot plot flipped toward a 2026 rate hike. Stocks dropped on the decision, then bought the dip - the S&P 500 rallied to 7,500.58 the next day, a two-week high, as the US ended its blockade of Iran and oil kept sliding. SpaceX spiked to a $225 all-time high before rolling over, and Bitcoin slid toward $60,000, the one risk asset left out of the rally. Markets were closed Friday for Juneteenth.
Week of June 15-19, 2026 (markets closed Thursday's regular session aside, Friday was the Juneteenth holiday). Data from market closes and the June FOMC statement.
S&P 500 close on Thursday, a two-week high and up about 0.9% on the holiday-shortened week - stocks shrugged off the Fed and chased the Iran-peace tailwind
The Fed held at 3.50-3.75% for a fourth straight meeting, but the dot plot flipped to signal a 2026 hike and PCE was revised up to 3.6%
Bitcoin slid toward the $60,000 line as ETF outflows mounted - the only major risk asset that missed the record rally
Warsh's first surprise: the dot plot flipped toward a rate hike
All week the tape waited on the Federal Reserve - and on the first meeting chaired by Kevin Warsh. The June FOMC held its target rate at 3.50-3.75 percent for a fourth straight meeting, exactly as expected. The shock was in the projections. The updated dot plot no longer shows cuts on the horizon; the median now pencils in a slightly higher rate by year-end, with nine of the participants penciling in at least one 2026 hike against just one looking for a cut. PCE inflation was revised sharply higher, to 3.6 percent.
That is a hawkish turn, and the market's first reaction was to sell: the S&P 500 fell about 1.2 percent on the decision Wednesday as bond yields jumped. Warsh, in his first press conference, declined to place his own dot but made the message plain: with inflation re-accelerating and the labor market still firm, the committee is far more worried about prices than about growth. The era of pricing in cuts is, for now, over.
Last week we wrote that the rebound rested on a geopolitical headline rather than a shift in the rate regime, and to watch whether the revived cut odds survived. They didn't just fail to survive - the Fed flipped the other way, toward hikes. The regime didn't soften; it hardened.
And stocks bought the dip anyway: the S&P snapped right back
Here is the part that defines the week: a hawkish Fed could not keep the market down for even a full session. On Thursday the S&P 500 rallied 1.1 percent - up 80.48 points - to close at 7,500.58, a two-week high, with the Nasdaq and the small-cap Russell 2000 leading the bounce. The catalyst wasn't the Fed at all: it was the news that the United States had ended its blockade of Iran, accelerating the collapse in oil prices that has quietly become this market's most important story.
Net it out across the holiday-shortened week - Friday was closed for Juneteenth - and the index finished up roughly 0.9 percent, clawing back toward the record 7,617 it set at the start of June before the jobs-report scare. A market that can take a flip-to-hikes dot plot on the chin and still rally to a two-week high is a market being driven by something stronger than the Fed. That something is cheaper energy.
A 1 percent rally two days after the Fed signaled hikes is a remarkable tell. The bond market heard "higher for longer" and the stock market heard "the Iran war is ending and oil is crashing" - and decided the second story matters more. For now, it does.
The engine of the record: the US ended the Iran blockade and oil kept falling
The real driver of the week was energy. With the US-Iran conflict winding down, Washington lifted its blockade, the Treasury issued a 60-day license authorizing Iranian oil sales, and tankers began moving through the Strait of Hormuz again. Crude, which had touched $100 in the spring, slid into the mid-$70s and kept going - Brent near $78 and West Texas Intermediate around $75 mid-week, with the path of least resistance still lower.
Cheaper oil is doing the disinflation work the Fed says it still doesn't see. That tension - a hawkish central bank versus a collapsing oil price - is the whole market right now. Equities are betting energy wins; the Fed is insisting it won't until the data proves it. It is worth keeping the skepticism we flagged last week: peace headlines have whipsawed before, and a single fresh flare-up could put the oil premium - and the rate fear - right back on the table.
Oil sliding through the mid-$70s with the Strait reopening is the cleanest disinflation signal in months - and it is exactly why stocks could ignore a hawkish Fed. The risk is symmetry: the same headline that powered this record can reverse it if the truce cracks.
SpaceX euphoria peaked - then rolled over
Week one of trading for the biggest IPO in history was a parabola. After closing its debut at $161, SPCX jumped to $192.50 on Monday and printed an all-time high of $225.64 on Tuesday, briefly making it one of the most valuable companies on Earth. Then the air came out. The stock fell nearly 5 percent Wednesday to $191.82 - its first full-session decline - and slid another 3.6 percent Thursday as profit-taking replaced the one-way chase.
Even after the reversal, SPCX ended the week comfortably above both its $161 debut close and its $135 IPO price - early allocators are still well in the green. But the round trip from $225 is the market beginning to price a tiny float honestly rather than chasing it. As we said on debut day, the catalysts that matter for this stock - the first lock-up expiration and index-inclusion mechanics - are still weeks away. Week one was sentiment; price discovery is ahead.
A spike to $225 and a fade back toward $185 in a few sessions is what a thin float does when the euphoria meets the first wave of profit-taking. SPCX is still a blockbuster on paper - but the easy money from the debut is already gone.
The tell: Bitcoin got left out of the record rally
For all the records, one corner of the market never showed up to the party. Bitcoin, which bounced to roughly $63,500 on last week's peace-deal impulse, spent this week grinding lower toward the $60,000 line even as stocks set all-time highs. The hawkish Fed hit the highest-beta, non-yielding asset hardest, spot-ETF outflows kept building, and capital that might once have chased crypto rotated into the AI trade instead.
This is the divergence we have been tracking since May's $80k "reclaim" turned into June's bleed toward $60k, and it sharpened this week into something stark: record highs on Wall Street, a steady bleed in crypto, on the very same days. A non-yielding asset is the last thing the market wants to hold into a Fed that just flipped toward hikes - and with $60,000 directly below spot, that round number is the line the whole crypto market is now watching.
When stocks make records and BTC bleeds toward $60k on the same week, the "risk-on hedge" thesis is on trial. Crypto isn't trading like tech-with-leverage anymore - it's trading on its own broken story.
What this means for your portfolio
The Fed flipped hawkish and stocks didn't care. A fourth straight hold paired with a dot plot pointing to a 2026 hike sent the market down 1.2 percent for a day - then the S&P rallied back to 7,500.58, a two-week high. Oil did the disinflation work the Fed wouldn't.
Oil is the swing factor. The US ending the Iran blockade sent crude into the mid-$70s and powered the record. Watch the Strait of Hormuz - if the truce cracks, the oil premium and the rate fear both come straight back.
SpaceX (SPCX) euphoria peaked at a $225 high, then faded three straight sessions. Still above its $135 IPO price, but the one-way chase is over - the lock-up and index-inclusion catalysts that actually matter are still ahead.
Bitcoin is the tell. BTC slid toward $60k while stocks set records - left out of the rally on ETF outflows, a hawkish Fed, and rotation into AI. The decoupling everyone debated is here, and $60,000 is the line to watch.
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