Wall Street holds near highs as Fed cuts get pushed back

U.S. equities have stayed close to record levels even as several large banks delayed predictions for Federal Reserve interest-rate cuts. Investors are pricing a longer period of restrictive policy while betting that corporate profits and capital spending will keep shares supported.

Standard Chartered on June 19 projected the federal funds rate would stay in a 3.50%–3.75% range through the rest of 2026 and forecast a single 25-basis-point cut in the first half of 2027. The bank maintained an overweight position on global equities, preferring U.S. and Asia ex-Japan markets, and put the S&P 500 target at 7,950 by mid-2027.

Goldman Sachs moved its first expected rate reductions into 2027, targeting cuts in June and December of that year. Citigroup now projects easing in October and December 2026, followed by another reduction in January 2027. UBS Global Wealth Management has shifted its first cuts to March and June 2027.

Standard Chartered estimated second-quarter U.S. growth at about a 2.2% seasonally adjusted annual rate and forecast full-year growth near 2.1%. The bank cited spending on artificial intelligence-related projects, a recovering labor market, and rising manufacturing activity as sources of support for the economy and corporate revenue.

Policy signals from the Federal Reserve altered market expectations. Equities dipped after the central bank chair’s recent policy meeting highlighted inflation concerns, then recovered as investors focused on corporate earnings momentum and developments reducing near-term geopolitical risk, including moves toward an agreement that could ease tensions in the Strait of Hormuz.

Not all assets held up. Bitcoin traded near $62,000 after falling from above $67,000 earlier in the week. Gold futures dropped about 1.8% to roughly $4,173 an ounce after earlier trading above $4,350, with rising real yields and a stronger dollar cited as factors pressuring demand for the non-yielding metal.

Market participants described a widening split between equities, which are approaching record highs, and speculative or non-yielding assets that have struggled as markets price in a longer stretch of higher rates. Firms that revised forecasts pointed to persistent growth and corporate spending as reasons prices for stocks have so far remained elevated despite tighter monetary conditions.