By Katy Barnato

The Federal Reserve is widely expected to keep interest rates on hold Wednesday, shifting focus to officials' economic and rate projections. Meantime, President Trump is considering a potential strike on Iran.

Hopes for a quick resolution to the Israel-Iran conflict have dimmed, and the U.S. has expanded its military footprint in the region. Trump has called for Iran's unconditional surrender and said he won't target the country's leader "for now."

Stocks wavered early Wednesday. Oil prices were steady, following Tuesday's sharp gains. Rising tensions in the Middle East have fueled concerns of disruption in the Strait of Hormuz, through which roughly one-fifth of the world's petroleum is ferried.

Fed policymakers are thus navigating a complex environment. Higher energy prices come as economists worry that Trump's tariffs could spur inflation. Thus far, inflation data has defied fears, with the consumer-price index showing muted rises in May.

A July 9 deadline for a slate of higher tariffs looms for some of the U.S.'s closest trading partners, after Trump left this week's G-7 summit with no new trade agreements. Trump and Canadian Prime Minister Mark Carney are expected to reconvene this week for more deal talks.

In recent trading:

Stocks wavered at the open. Major U.S. indexes fell by as much as 0.9% Tuesday. U.S. stock and bond markets will be shut Thursday for Juneteenth.

Oil prices were steady. U.S. crude futures rose more than 4% Tuesday, settling at their highest since January.

U.S. Treasury yields weakened slightly, as did the WSJ Dollar Index.

Bitcoin prices edged below $105,000. The Senate passed the Genius Act, a bill to regulate stablecoins, in a win for the cryptocurrency industry.

Write to Katy Barnato at katy.barnato@wsj.com

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

June 18, 2025 09:39 ET (13:39 GMT)

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