Stocks and Bonds Drop as War Spurs Oil, Fed Holds: Markets Wrap

Wall Street remained on edge as an oil surge drove stocks and bonds lower, while Federal Reserve Chair Jerome Powell said uncertainty about the war’s impact on inflation made future rate policy harder to forecast.

While the central bank kept its projections for a rate reduction in 2026 and another one in 2027, traders trimmed their bets on a cut this year. Treasury yields climbed as Powell said it’s important to keep rates mildly restrictive while noting the Fed is in a tough position. The S&P 500 dropped 1.4% in its worst Fed day since 2024. Brent hovered near $110 in late hours.