June 16 May be a Big Day for the Stock Market and Set the Stage for What Happens Next.
Written by Adria Cimino for The Motley Fool -> The Federal Reserve meets on June 16 and 17 to consider the economic situation and potentially act on interest rates. The last interest rate action took place in December, with a quarter-point decrease. President Donald Trump crit
The Federal Reserve meets on June 16 and 17 to consider the economic situation and potentially act on interest rates.
The last interest rate action took place in December, with a quarter-point decrease.
President Donald Trump criticized former Fed chair Jerome Powell for not cutting rates further.
The S&P 500 's bull market has roared on in 2026, extending the gain of 78% over the past three calendar years. Investors, optimistic about the future of artificial intelligence (AI), have piled into tech giants, and the enthusiasm has spilled over into other growth sectors as well. The idea is that AI may help companies become more efficient and innovative, and save money -- and all of this is fantastic news for earnings growth over time.
But the S&P 500's path hasn't been completely smooth. In fact, various headwinds temporarily interrupted the momentum, from concern about the longevity of the AI revolution to worries about turmoil in Iran. This pushed the index to decline in the first quarter, though it's recently rebounded and is now heading for an increase of more than 8%.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Still, the jury is out when it comes to the index's performance for 2026. And this is because one particular headwind continues to weigh on investors' minds: the risk of rising inflation and an eventual interest rate hike to keep it under control. This is why June 16 may be a big day for the stock market -- and set the stage for what happens next.
So, first, let's look at the recent interest rate picture and the latest inflation report. To offer context, it's important to consider what's happened over the past few years. Rising inflation in 2022 prompted then Federal Reserve chair Jerome Powell to launch interest rate increases -- the move did its job of taming inflation , and Powell started lowering rates two years later. Though Powell continued to decrease rates by a quarter point during three of last year's meetings, including the one in December, President Donald Trump, calling for more rate cuts, criticized the Fed chief.
