Finance

The Federal Open Market Committee began its two-day meeting on Tuesday with a consensus expectation to keep the benchmark interest rate between 3.5% and 3.75%. This meeting is expected to be the final session chaired by Jerome Powell before his successor, Kevin Warsh, potentially takes over. Market projections for rate cuts later in 2026 have diminished significantly due to persistent inflation risks tied to high energy prices.

Crude oil futures surged as the continued closure of the Strait of Hormuz restricted global supply. Brent crude climbed toward $108 per barrel, while West Texas Intermediate surpassed $96, marking significant multi-week highs. Major energy companies like BP have reported substantial profit increases driven by this volatility, though these gains are offset by broader market concerns regarding fuel-driven inflation.

The technology sector experienced pressure after reports surfaced that OpenAI missed its internal revenue and user growth targets. This has led to a sell-off in cloud-computing and semiconductor stocks, including Oracle and AMD, as investors reassess the immediate profitability of massive AI investments. Analysts have noted a growing divide in the sector, with hardware and chip stocks generally outperforming software firms during this consolidation phase.