Warsh Out. Stocks tumbled on Wednesday after Kevin Warsh’s first press conference as chairman of the Federal Reserve.

Warsh said he wasn’t concerned with the market’s reaction to his debut, which is for the best, given the Dow Jones Industrial Average slid 1% while the S&P 500 fell 1.2% and the Nasdaq Composite lost 1.3%.

Interest rate increases are one of Wall Street’s concerns, and those seem to be on the table, potentially as soon as this fall, opines Capital Economics’ Chief North America Economist Stephen Brown. “The median projection now points to a clear chance of the FOMC hiking and, with Chair Kevin Warsh stating ‘we’ve got some work to do on the price stability point,’ we continue to expect the Fed to raise interest rates this year.”

Investors might also be frustrated that Warsh thinks the Central Bank should keep its cards closer to its chest, and not provide as much information about its intentions for the future. “Less forward guidance means more optionality for the Fed but likely more volatility in future rate path pricing,” notes BNY Investments Newton Head of Fixed Income Ella Gude.

The fact that the Fed kept rates steady today was expected, but Warsh’s limited comments suggest there was back and forth on the decision, which wasn’t necessarily unanimous.

Investors may have to get used to more ambiguity, though that’s not necessarily uncharted territory. “We are going back to the days of Alan Greenspan when FOMC statements were deliberately minimalist, opaque (“constructive ambiguity”), and focused on actions, not explanations,” writes LPL Financial Chief Economist Jeffrey Roach.

Greenspan had a popular tenure as Fed chair, but his reputation afterwards didn’t fare as well. Only time will tell how Warsh measures up to his predecessors now that he’s in charge.

The Hot Stock: Moderna +11.6%
The Biggest Loser: Carvana Co. Class A -10.3%

Best Sector: Industrials -0.1%
Worst Sector: Communication Services -3%

The Iran War appears to be winding down, but the conflict hasn’t officially come to a close, even if Wall Street has moved on.

Oil prices fell on Wednesday. But details about what exactly the U.S. and Iran will be signing later this week “leave plenty of room for uncertainty,” my colleague Anita Hamilton reports.

President Donald Trump threatened to resume bombing Iran if the deal isn’t signed. That didn’t shake traders’ faith, though, that the Strait of Hormuz will reopen, even if others warn that could be overly rosy thinking. Anita writes:

The president has said that the Strait will be open, without tolls, beyond that 60 day mark. Yet analysts warn that a toll after the first 60 days remains a possibility. If that happens it would once again restrict the flow of oil, given many Western shippers may balk at paying.

As usual, investors have little choice but to wait and see.

Kroger reports first-quarter fiscal-2026 results tomorrow.

—Dan Lam

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