CNBC Daily Open: The prospect of an Israel-Iran ceasefire dims as Trump weighs strikes

Hopes of a quick ceasefire between Israel and Iran were dashed by several social media posts from U.S. President Donald Trump. As he took an early departure from the Group of Seven summit, Trump said it “certainly has nothing to do with a Cease Fire” and that he was involved in something “much bigger than that.”

What’s bigger than a ceasefire? An escalation in conflict on the prospect of the U.S. joining the hostilities in the Middle East. Trump, on his social media platform Truth Social, threatened Iran’s leader Ayatollah Ali Khamenei that he is an “easy target” and wants him to “surrender.”

Trump’s posts on Truth Social brought U.S. stocks lower and caused oil prices, which were on the retreat Monday, to shoot up more than 4% during Tuesday’s trading session in America. A weaker-than-expected U.S. retail sales report in May also added to the heavy sentiment in markets.

The U.S. Federal Reserve’s rate-setting meeting will conclude Wednesday. While central bankers are expected to leave interest rates unchanged, the committee will release updated projections of where they see rates going. Chair Jerome Powell will also answer questions from the media at this press conference. All of those are market-moving events — so it’s a relief, at least, they come from official communiques.

Trump weighs strike on Iran
A U.S. military strike against Iran is one of the options Trump is considering, after meeting with his top national security advisors on Tuesday afternoon, current and former administration officials told NBC News. Earlier in the day, Trump wrote on Truth Social that the U.S. knows “exactly” where the Iran’s leader, Ayatollah Ali Khamenei, is “hiding,” and demanded “UNCONDITIONAL SURRENDER!”

U.S. markets fell while Asia trades mixed
U.S. stocks retreated Tuesday as Trump’s rhetoric on Iran ramped up. The S&P 500 fell 0.84%, the Dow Jones Industrial Average shed 0.7% and the Nasdaq Composite was down 0.91%. Asia-Pacific markets were mixed Wednesday. At 1:30 p.m. Singapore time, Japan’s Nikkei 225 rose 0.77% even as the government reported a drop in exports in May, while South Korea’s Kospi added 0.56%. Hong Kong’s Hang Seng Index, however, lost 1.23%.

Exports from Japan fall in May
Japan exports in May declined 1.7% year over year, according to data from Japan’s trade ministry released Wednesday. While that drop fares better than the 3.8% decline expected from a Reuters poll of economists, it’s still the steepest fall since September 2024 and reverses the 2% growth in April. Exports to the U.S. dropped 11.1% from a year earlier, much worse than than the 1.8% fall in April.

Meta trying to poach OpenAI staff: Altman
On a podcast released Tuesday, OpenAI CEO Sam Altman said Meta had sought to hire “a lot of people” from the artificial intelligence company, and had offered signing bonuses as high as $100 million — but “so far none of our best people have decided to take them up on that.” Meta CEO Mark Zuckerberg is frustrated with his firm’s standing in the AI space, sources told CNBC.

U.S. passes landmark crypto bill
The U.S. Senate on Tuesday passed the GENIUS Act, a landmark crypto bill that establishes federal guardrails, including full reserve backing, monthly audits, and anti-money laundering compliance, for U.S. dollar-pegged stablecoins. It also opens the door to a range of issuers, including banks, fintechs, and major retailers looking to launch their own stablecoins or integrate them into existing payment systems.

[PRO] Global stocks will reign: Investors
The era of U.S. exceptionalism might be coming to an end. Not only have global stocks vastly outperformed those in America year to date, investors also think they will be the best-performing asset class over the next five years, according to the results of Bank of America’s latest fund manager survey.

The Fed is likely to keep rates the same but give a forecast that moves markets. What to expect

While any immediate movement on interest rates seems improbable, the Federal Reserve’s policy meeting, which concludes Wednesday, will feature important signals that still could move markets.

Among the biggest things to watch will be whether Federal Open Market Committee members stick with their previous forecast of two rate cuts this year, how they see inflation trending, and any reaction from Chair Jerome Powell to what has become a concerted White House campaign for easier monetary policy.

As things stand heading into the meeting, markets are pricing in the next cut to come in September, which would be the one-year anniversary of a surprisingly aggressive half-percentage-point reduction the FOMC instituted amid concerns over the labor market. The committee added two more quarter-point moves by the end of the year and has been on hold since.