TORONTO — Canadian and U.S. stock markets finished in negative territory on Wednesday amid fears of higher U.S. interest rates. “You’ve got markets recalibrating after the Federal Reserve decision,” said Anish Chopra, managing director with Portfolio Management Corp. The U.S. Federal Reserve kept interest rates unchanged on Wednesday. However, the U.S. central bank also released projections showing policy-makers see the federal funds rate ending this year and the next two at higher levels than they had been forecasting a few months ago. “The hold in interest rates was expected, but the projections are now hawkish with nine of 19 Fed officials showing the possibility of a rate hike later this year, and that’s really taken some of the shine off the earlier relief that markets got from lower oil prices,” said Chopra. The S&P/TSX composite index was down 264.47 points at 35,125.11. In New York, the Dow Jones industrial average was down 507.12 points at 51,492.55. The S&P 500 index was down 91.25 points at 7,420.10, while the Nasdaq composite was down 354.69 points at 26,021.66. Higher U.S. interest rates can keep a lid on inflation south of the border, but they also slow the economy and hurt prices for investments. One important policy-maker 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 central bank, Warsh said he’s also considering a revamp of how the Fed communicates with the market and American 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 Fed to react to them. Oil prices were steadier Wednesday following slides earlier in the week on optimism about the tentative U.S.-Iran deal to get the global flow of oil going again. Iran is set to take steps to reopen the Strait of Hormuz once the deal is signed, which would allow oil tankers to deliver crude from the Persian Gulf again and hopefully take pressure off inflation. The price for a barrel of Brent rose 0.7 per cent to US$79.55. The August crude oil contract was up 74 cents US at US$76.01 per barrel. “Markets are looking at the Middle East as less of an immediate supply shock and more of a fragile de-escalation story, which hopefully continues and results in lower oil prices,” Chopra said. The Canadian dollar traded for 71.26 cents US compared with 71.45 cents US on Tuesday. The August gold contract was up US$27.00 at US$4,381.40 an ounce. --- Daniel Johnson, The Canadian Press With files from The Associated Press This report by The Canadian Press was first published June 17, 2026.
