Federal Reserve Chair Kevin Warsh kept markets guessing about monetary policy direction, refusing to provide forward guidance despite rising rate hike projections from his colleagues. Nine of 19 Fed officials now expect at least one rate increase by year-end, a notable shift from March when none foresaw such action. Warsh's silence broke from tradition and left investors parsing signals.

Stocks reacted sharply to the uncertainty. The S&P 500 fell 1.2% while the Dow dropped 1%, shedding 507 points. The Nasdaq slid 1.3%. Bond markets also sold off, with the 2-year Treasury yield climbing to 4.16% and the 10-year note reaching 4.462%. Investors struggled to price in the Fed's mixed messages amid growing inflation concerns.

President Trump defended the new Iran ceasefire agreement, arguing it prevents economic catastrophe while warning of renewed attacks if Tehran violates terms. The International Energy Agency warned of potential oil oversupply next year if the Strait of Hormuz remains open, pressuring markets already watching U.S. Strategic Petroleum Reserve levels hit their lowest point since the 1980s.

Consumer spending showed resilience despite market volatility. Retail sales rose 0.9% in May, accelerating from April's 0.4% gain, while pending home sales jumped 3.8%, far exceeding economist forecasts of 1% growth. The data suggests households continue spending despite elevated uncertainty.