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Housing Starts for May; Weekly Jobless Claims; Canada Wholesale Trade for April

Stock futures fell sharply Thursday after the Federal Reserve boosted interest rates the most since 1994, and signaled to Wall Street it would remain aggressive in its campaign to cool historically high inflation.

Chris Zaccarelli, chief investment officer for Independent Advisor Alliance, said the main takeaway for investors was that "inflation has the Fed's attention and that they are taking it very seriously."

Zaccarelli said he's not convinced the worst is behind the stock market and the economy because they "still face considerable headwinds." But, he added, "at least in the short run, we may be entering a more optimistic phase in this market cycle."

"The market is grappling with the reality that there is a regime change going on," said Aoifinn Devitt, chief investment officer at Moneta. "Investors are either worried about inflation or they are worried about the Fed crushing the economy."

Interest-rate increases of that size could unsettle investors if they feel the Fed is racing too quickly to get ahead of inflation, Devitt said. "That may lead to even more anxiety in the market."

Overseas, European indexes opened sharply lower. The pan-continental Stoxx Europe 600 index dropped 1.6% with heavy losses for rate-sensitive technology firms. In Asia, indexes were more mixed, although the Hang Seng Index fell 2.2%.

Pantheon Macroeconomics said the risks of an economic recession in the U.S. are higher after the Fed's meeting.

The Fed is likely to tighten policy too much if it keeps the promise to increase rates until it sees a clear trend of lower month-to-month inflation prints because effects from monetary policy work with long lags, said Ian Shepherdson, chief economist.

"Whether that means a recession follows will depend on the resilience of the private sector, which right now is sitting on huge piles of excess cash and is running rock-bottom debt service ratios."

The Swiss franc hit a two-month high versus the euro after the Swiss National Bank unexpectedly raised interest rates and signalled further rises.

The SNB lifted its key rate by 50 basis points to -0.25% to stem inflation, whereas most analysts expected rates to remain unchanged. The SNB said it cannot be ruled out that further rate increases will be necessary in the foreseeable future to stabilise inflation.

The central bank also reiterated its willingness to intervene in the foreign exchange market but omitted its usual line that the franc remains highly valued.

Sterling was lower again ahead of the Bank of England policy decision where it's expected to lift interest rates but by much less than the Fed's 75 basis points rise.

U.K. inflation is near double digits, but unlike the Fed, the BOE doesn't have the flexibility to raise rates aggressively as the U.K. economy is shrinking, said 60 Second Investor managing editor Kathy Lien. Although the BOE will signal further rate rises beyond Thursday, a smaller move should limit demand for sterling, Lien said.

Economists polled by the WSJ expect the BOE to lift its key rate by 25bp to 1.25%.

Read: Bank of England Could Be Forced to React to Pound's Weakness.

The long end of the Treasury curve could soon offer buying opportunities, said Charles-Henry Monchau, chief investment officer at Syz Bank.

Syz Bank, not overly surprised by the Fed's 75 basis-point interest rate rise, thinks the central bank is now firmly resolved to conduct a restrictive monetary policy via rapid and pronounced tightening in order to bring down inflation.

"The 75bps becomes the new 50bps," Monchau said. While this strategy involves the risk of a severe slowdown or even a recession, the fact "the Fed is now very quickly aligning itself with market expectations shows it's determined to regain credibility" is positive, Monchau said.

Oil futures edged higher in Europe in a possible technical rebound after they settled at their lowest in two weeks on Wednesday as U.S. supplies unexpectedly climbed a second week and after the Fed hiked rates.

Volatility in the oil market appears to be on the rise again as the economic outlook darkens, said Citi Research analysts, citing the IEA's latest "bearish" report.

Metals prices were mixed in European trading after the Fed rate rise, with sentiment remaining weak given the macro economic forecast of rising inflation and China's strict covid policy hampering a restart in industrial activity.

"It does seem like they are trying to kick the can down the road when it comes to a recession in what the Fed calls a 'soft landing'," analysts at Marex said.

Fitch said steel prices could trend higher as Chinese infrastructure demand kicks in from the second half onward.

"Demand recovery in China appears to be outpacing supply recovery as Covid-19 restrictions are eased."

Dwindling exports from Ukraine due to the Russian invasion as well as an unwillingness from some market participants to import Russian-made steel are also supporting prices of the construction material, Fitch said.

Cosmetics Maker Revlon Files For Chapter 11

Revlon Inc. filed for bankruptcy, potentially ending a decadeslong bet on the beauty products company by Ronald Perelman, its billionaire controlling shareholder.

Mr. Perelman bought Revlon in 1985 and built a reputation for always riding to its rescue when its future looked bleak, often through rescue loans or cash infusions. Now he faces losing control of the cosmetics business as it confronts a heavy debt load, inflation and supply-chain pressures and competitive threats.

World's Biggest Miner Scraps Immediate Thermal-Coal Exit

ADELAIDE, Australia-The world's largest mining company abandoned the sale of its last thermal coal mine, and said it would aim to close the Australian pit in 2030.

Despite record-high coal prices, BHP Group Ltd. said it failed to find a buyer for the Mt Arthur mine, which is one of Australia's biggest coal operations but is technically complex and will have a large cleanup bill when it closes.

Abbott Halts Production at Michigan Baby-Formula Plant

Abbott Laboratories said it has paused baby-formula production at its plant in Sturgis, Mich., after recent thunderstorms flooded part of the facility, causing another setback for the company's efforts to help alleviate a nationwide formula shortage.

Abbott said Wednesday that it had stopped production of its EleCare specialty formula, which it had recently restarted, so it could assess damage from the storms and clean the plant. The halt will delay distribution of new product by a few weeks, the company said.

Elon Musk Expected to Reiterate Desire to Own Twitter in Meeting Thursday

Elon Musk is expected to confirm his desire to own Twitter Inc. when he speaks to the social-media company's employees on Thursday, according to a person familiar with the matter.

The billionaire Tesla Inc. chief executive is slated to answer pre-submitted employee questions for roughly an hour at a virtual Twitter all-hands meeting Thursday morning West Coast time, the person said. In addition to reiterating his interest in owning the company and his view of its importance in the world, Mr. Musk is likely to clarify recent comments about remote work and touch on aspects of his strategy for Twitter, including the role of advertising and subscriptions.

BitMEX Co-Founder Sentenced to Probation on U.S. Compliance Charge

Benjamin Delo, a co-founder of cryptocurrency derivatives exchange BitMEX, was sentenced to 30 months probation for violating U.S. anti-money-laundering law.

Mr. Delo, who was sentenced Wednesday in federal court in New York, has also paid a $10 million penalty as part of a deal with prosecutors and the U.S. Commodity Futures Trading Commission. He pleaded guilty in February to a single count of violating the Bank Secrecy Act.

Rising Interest Rates Could Cool Industrial Investment, Executives Say

Rising interest rates could pinch freight carriers and put industrial real-estate transactions on pause, executives say, but tighter policy might help if it succeeds in slowing the inflation that is driving up the cost of projects.

"If there's any one sector that really needs inflation to get under better control, it is the industrial sector," said Kevin Thorpe, chief economist at real-estate services firm Cushman & Wakefield.

Investors See Higher Defaults Ahead as Interest Rates, Inflation Take a Toll

Debt investors are betting that the Federal Reserve's latest rate hike is a prelude to a downturn for some U.S. companies as rising borrowing costs are likely to put a damper on consumer spending and raise expenses for business.

The Federal Reserve on Wednesday announced a 0.75-percentage-point raise of the federal-funds rate, the central bank's largest rate hike since 1994. Fed projections released Wednesday also showed that the policy makers expect to raise rates further as the year progresses.

Swiss National Bank Unexpectedly Increases Interest Rates as Inflation Rises

The Swiss National Bank on Thursday unexpectedly increased its policy interest rate for the first time since September 2007.

The country's central bank increased its policy rate by half a percentage point, to minus 0.25% from minus 0.75%, in an effort to tame inflation. Economists polled by The Wall Street Journal had expected the bank to leave rates on hold.

Prices for New Homes in China Slide Further

A decline in Chinese new-home prices accelerated in May, even as local governments and banks ramp up support for a real-estate sector that has suffered from tightened regulations that have pummeled home sales and pushed some large developers to the brink of collapse.

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