U.S. stock futures rose on Thursday, with the Dow Jones, Nasdaq 100, and S&P 500 indices advancing following Tuesday's sharp sell-off. The rebound comes as investors digest the Federal Reserve's decision to hold interest rates steady and look toward resilient economic conditions. The S&P 500 closed down 1.21% at 7,420.10 on Wednesday, marking its worst session in nearly a week, but futures suggest a recovery is underway.

Fed Signals Steady Policy

The Federal Reserve unanimously held the federal funds rate steady at 3.50%-3.75% during its first policy meeting under new Chair Kevin Warsh. The central bank signaled a potentially tighter long-term policy, with the median Fed official projecting the benchmark rate to end 2026 at 3.8%, up from 3.4% in March projections. Warsh announced five task forces to review Fed communications, the balance sheet, data sources, productivity and jobs in the AI era, and the inflation framework itself. Treasury yields reflected this stance, with the 10-year Treasury bond yielding 4.45% and the two-year bond at 4.17%.

Stocks in Focus

Several stocks moved significantly in premarket trading. Freecast Inc. (NASDAQ: CAST) zoomed 87.96% after announcing a reseller agreement for Starlink Business services. Smith & Wesson Brands Inc. (NASDAQ: SWBI) surged 15.37% after posting better-than-expected fourth-quarter results. Safe Bulkers Inc. (NYSE: SB) rose 3.40% following strong first-quarter financial results. Conversely, Sleep Number Corp. (NASDAQ: SNBR) plunged 55.90% as Nasdaq plans to delist its common stock following its Chapter 11 bankruptcy filing.

Market Outlook and Data

Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, expressed optimism for the U.S. economy, noting good GDP growth through the end of next year. While he expects inflation to ease, he cautioned it will remain higher than the Fed desires, likely keeping rates unchanged. Wren favors equities over fixed income, recommending U.S. Large Cap and Mid Cap Equities, particularly in Industrials and Utilities, and anticipates the S&P 500 will reach the 8,600-8,800 range next year.

Investors are awaiting initial jobless claims for the week ending June 13 and June's Philadelphia Fed manufacturing survey. Markets will be closed on Friday for the Juneteenth National Independence Day holiday.

The US stock market has climbed the wall of worry and the economy has held firm, RBC Wealth Management suggests in its Global Insight Mid-Year 2026 Outlook released on June 15, 2026. Despite a demanding backdrop of geopolitical tension, elevated Treasury yields, and looming midterm election uncertainty, the firm notes that corporate earnings have been the great stabilizer this year. The profit outlook for 2026 and 2027 has brightened notably since January, with the bull market persisting into its fourth year.

"Corporate earnings have been the great stabilizer this year, and the profit outlook for 2026 and 2027 has brightened notably since January," said Kelly Bogdanova, Vice President and Portfolio Analyst at RBC Wealth Management–U.S. "The bull market is persisting into its fourth year, the economy remains resilient and investors who stay disciplined are being rewarded, even with real hurdles still ahead."

US equities: Earnings brighten as market eyes midterm elections

The US stock market has shown notable resilience in 2026, with the S&P 500 rallying year-to-date through mid-June and the Information Technology sector outperforming sharply. The Information Technology sector delivered a standout first quarter, posting 49% year-over-year profit growth, with AI capital spending providing continued upward momentum to consensus earnings forecasts across multiple sectors.

With the midterm elections approaching on November 3, RBC Wealth Management is mindful that the S&P 500 has experienced an average 21% correction surrounding midterm election years since 1934. Additional volatility cannot be excluded, particularly if Treasury yields continue to rise or midterm election angst materializes. RBC Wealth Management recommends maintaining a Market Weight position in US equities, while scrutinizing Technology holdings where sharp rallies could give way to meaningful volatility.

US fixed income: Yields could reach new cycle highs

Global bond markets are navigating a challenging stretch at the midpoint of 2026, with rising yields pushing total returns modestly into the red year-to-date. Thirty-year government bond yields across major economies are at or near twenty-year highs, with the simple average breaching 4.0% for the first time since early 2009.

RBC Wealth Management's base case is that the Fed holds rates steady through 2026, but with a clear bias toward potential hikes. The firm sees scope for the benchmark 10-year Treasury yield to test key highs from this cycle: 4.8% from 2025 and potentially the 5.0% level from 2023. With bond price appreciation likely to remain elusive, RBC advises investors to focus on maximizing income.

Trends: Unstoppable forces reshaping long-term investment

RBC Wealth Management's mid-year outlook identifies five trends set to shape investment portfolios for decades. The impactful forces are driven by demographics, transformative advances in science and computing, rapidly shifting energy economics and intensifying geopolitical friction.