US Markets Eye Kevin Warsh’s First Fed Decision Amid Chip Rally

Wall Street is bracing for a pivotal moment as investors await the first interest-rate decision under new Federal Reserve Chair Kevin Warsh. While semiconductor stocks drive a premarket rebound, the global market remains focused on the central bank's stance on inflation and the shifting geopolitical landscape.

Markets Await Federal Reserve Policy Decision

All eyes are on the Federal Open Market Committee (FOMC) meeting, with the official decision due at 2:00 p.m. ET. The consensus among market participants is that the Fed will hold interest rates steady within the current 3.50%–3.75% range.

This meeting marks a significant milestone as it is the first major policy move under the leadership of Kevin Warsh. Investors are not just looking at the numbers but are laser-focused on Warsh's subsequent press conference. The market is seeking clarity on his outlook regarding inflation, unemployment, and the broader economic trajectory. Currently, traders are pricing in a 43% chance of a 25-basis-point rate hike in December, though economists anticipate a cautious tone from the new Chair.

Semiconductor Rebound and Corporate Winners

Despite the cautious macro environment, US stock futures for the S&P 500 and Nasdaq have edged higher, primarily fueled by a resurgence in the chip sector. Semiconductor giants including Broadcom, Micron Technology, Advanced Micro Devices (AMD), and Intel have all seen premarket gains ranging from 1.5% to 3.5%.

In the corporate earnings space, consumer-facing stocks are showing strength. Furniture manufacturer La-Z-Boy saw its shares surge by 15.7% after reporting fourth-quarter sales and profits that exceeded analyst estimates. Similarly, used-car retailer CarMax advanced 3.6% following a first-quarter revenue beat. Additionally, SpaceX continues its massive momentum, rising nearly 3% after recently surpassing Amazon in market value to become the world's fifth-most valuable listed company.

Geopolitical Tensions and Oil Price Volatility

The macroeconomic outlook is being heavily influenced by developments in the Middle East. Oil prices are hovering near three-month lows due to optimism surrounding a preliminary US-Iran peace agreement. Reports suggest a fragile truce has been extended by 60 days to facilitate further negotiations, which has eased immediate fears of supply disruptions through the Strait of Hormuz.

However, the market remains wary. US President Donald Trump has cautioned that the memorandum of understanding is not yet final and warned that military action could resume if diplomatic talks fail. This underlying uncertainty ensures that while lower oil prices are helping to mitigate inflation concerns, the energy market remains highly sensitive to geopolitical shifts.

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