Summary​
Markets ended the week on a cautious note as escalating Middle East tensions rattled investors, leading to a pullback in major U.S. stock indexes. While inflation data remained tame and consumer sentiment improved, surging oil and gold prices underscored rising geopolitical and economic uncertainty ahead of next week’s Fed meeting.

June 9-13, 2025 Market Updat... Jun 14 · The Investor’s Edge: Spr... 6:26   ​

🏦 U.S. Equities & Geopolitical Turmoil

U.S. stock markets closed lower this week, hit by renewed tensions in the Middle East. Following two consecutive weeks of gains, the S&P 500 and NASDAQ slipped marginally, while the Dow dropped over 1% on Friday alone amid heightened anxiety sparked by Israeli airstrikes on Iran’s nuclear sites.

🛢 Oil & Energy: Supply Fears Boost Prices

• Crude prices surged more than 7% on Friday, with WTI climbing nearly 8% intraday to ~$77 and Brent to $74—a four-month high—driven by fears of supply disruptions through the Strait of Hormuz .
• Diesel futures rose even more sharply—8%—as worries grew over disruptions to distillates
• According to JP Morgan, while current prices are near the low-$70s, a wider escalation could push crude beyond $120

📉 Inflation & Bonds: Calm Amid Turmoil

• May CPI rose just 0.1% MoM—below forecasts—with annual inflation at 2.4%, maintaining near four-year lows
• A robust 30-year Treasury auction drew strong demand, lowering yield to 4.84% from 4.91%, offering relief from recent long-end pressure.

🏅 Gold & Safe Havens: Investors Seek Shelter

• Gold climbed to ~$3,450/oz, extending its YTD surge (it began the year near $2,600). The precious metal benefited significantly from geopolitical jitters.

📊 Sector Snapshot

Energy stocks surged 5.3% this week, dominating sector performance as oil prices spiked amid geopolitical turmoil. Technology and Healthcare posted modest gains, with the former continuing to lead the quarter’s rally. On the downside, Financial Services and Industrials saw notable declines, while traditionally defensive sectors like Consumer Defensive and Utilities showed mixed results, reflecting broader investor uncertainty. Despite strong momentum in certain areas, most sectors remain in downtrend territory, signaling caution in equity markets.

Note: Energy led weekly gains (+5.3%) amid the oil rally, while Financials and Industrials lagged.

📈 Market Cap & Momentum Insights

• Technology gained across all company sizes, led by +190% in mid-cap and +101% in micro-cap segments.
• Healthcare saw strong micro- and nano-cap growth (+57% and +135%, respectively).
• Momentum indicators show predominance of “downtrend” signals across most sectors, especially Healthcare, Consumer Cyclical, and Technology (–80% downtrend percentiles), though Utilities and Real Estate show modest accumulation momentum.

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🌐 Trade & Sentiment

• U.S.–China trade talks yielded a consensus framework, pending presidential sign-off before implementation.
• University of Michigan sentiment rose sharply from 52.2 to 60.5 (prelim), the first uptick in six months, driven by easing inflation concerns.

🏛 Federal Reserve Preview

• All eyes are on the June 17–18 FOMC meeting, where no rate change is expected. Futures traders are now pricing in 1–3 cuts of 25 bps each by year-end.
• The Fed is likely to remain cautious, monitoring the impact of oil-induced inflation and tariffs, with official guidance suggesting potential rate cuts in Q3 or later.

🔍 Bottom Line

• Geopolitics dominate: The Israel–Iran conflict is reshaping risk sentiment—boosting oil and gold prices, pressuring equities and risk assets.
• Inflation remains benign: May CPI came in soft, reinforcing the Fed’s patient stance.
• Market divergence: Energy shines; cyclical sectors struggle amid continued momentum decay.
• Eyes on Fed meeting: Investors await more clarity from June's FOMC on future rate cuts.

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