US Stocks Sink Wednesday               06/17 15:02

   The U.S. stock market sank Wednesday after nearly half the policymakers at 
the Federal Reserve indicated they may want to raise interest rates before the 
end of the year. 

   NEW YORK (AP) -- The U.S. stock market sank Wednesday after nearly half the 
policymakers at the Federal Reserve indicated they may want to raise interest 
rates before the end of the year. Higher rates can keep a lid on inflation, but 
they also slow the economy and hurt prices for investments.

   The S&P 500 slumped 1.1% and erased an earlier, modest gain after the Fed 
released projections showing nine of 18 policymakers see the central bank 
raising its main interest rate at least once this year. The Dow Jones 
Industrial Average went from a gain of 281 points in the morning to a drop of 
438 points, or 0.8%, as of 3:30 p.m. Eastern time, and the Nasdaq composite 
sank 1%.

   One important policymaker at the Fed did not give a forecast for where the 
federal funds rate may end 2026 and the next couple years: Chairman Kevin 
Warsh. In his first press conference as head of the U.S. central bank, Warsh 
said he's also considering a revamp of how the Fed communicates with the market 
and U.S. households and businesses.

   That includes the end of dropping hints in Fed statements about where 
interest rates may be heading in the future, something called "forward 
guidance."

   Warsh said he wants Wall Street to react to incoming data about inflation, 
the job market and other economic data based on how they affect prices for 
stocks, bonds and other investments rather than how it expects the Federal 
Reserve to react to them.

   As part of that, Warsh said the Fed could make changes in its usual release 
of projections every three months showing where Fed officials suspect interest 
rates, the economy and inflation are heading in upcoming years.

   For now, though, Wall Street reacted uneasily to Fed officials' latest set 
of projections. Stocks zigzagged up and down several times following the 
release. The Fed also decided to keep the federal funds rate steady at this 
meeting, as it has all year so far.

   In the bond market, Treasury yields climbed. The yield on the 10-year 
Treasury, which influences rates for mortgages and other loans going to U.S. 
households and businesses, rose to 4.48% from 4.43% late Tuesday. The two-year 
Treasury yield, which more closely tracks expectations for Fed action, jumped 
more. It climbed to 4.20% from 4.05%.

   High yields in bond markets worldwide caused by worries about inflation have 
been threatening to slow economies and undercut prices for all kinds of 
investments.

   In the stock market, SpaceX erased an early gain and dropped 3.3%. It's 
potentially on track for its first loss since its ballyhooed debut on the U.S. 
stock market last week.

   That helped overshadow a jump of 15.2% for La-Z-Boy, which reported stronger 
profit and revenue for the latest quarter than analysts expected. It benefited 
from revenue made at newly opened stores, though Chief Financial Officer Taylor 
Luebke said the company continues to have "a measured view" of the broad sales 
environment.

   A report released Wednesday said retailers across the country saw their 
revenue grow at a faster pace in May than economists expected, offering hope 
that solid spending by consumers can support the economy. But high inflation 
has also made U.S. shoppers feel more discouraged about their finances.

   Iran is set to immediately take steps to reopen the Strait of Hormuz once 
the deal is signed, and that would allow oil tankers to exit the Persian Gulf 
once again and deliver crude to customers worldwide. The hope is that will take 
pressure off inflation.

   Oil prices were steadier Wednesday following sharp slides earlier in the 
week on optimism about the tentative U.S.-Iran deal to get the global flow of 
oil going again. The price for a barrel of Brent crude oil rose 0.7% to $79.55. 
It's still above its roughly $70 price from before the war, but it's well below 
its $100-plus price from a few weeks ago.

   Iran is set to immediately take steps to reopen the Strait of Hormuz once 
the deal is signed, and that would allow oil tankers to exit the Persian Gulf 
once again and deliver crude to customers worldwide. The hope is that will take 
pressure off inflation.

   In stock markets abroad, indexes were mixed across Europe and Asia.

   London's FTSE 100 added 0.1% after a report showed U.K. inflation remained 
at 2.8% in May.

   South Korea's Kospi jumped 1.6%, and Hong Kong's Hang Seng fell 0.7% for two 
of the world's bigger moves.