Weekend Update, June 16th, 2025
Bombs Drop, Buy Stocks?
Index, Sector, and Asset Performance
A quiet week due for a market pullback ended with an exclamation point, closing at its MOC low for the week due to bombs flying between Israel and Iran. The S&P 500 index fell -0.4% last week as tensions between Israel and Iran reached a boiling point. The S&P 500 finished the week at 5,977, remaining up +1.1% for June and +1.6% in 2025.
Before selling indiscriminately, here’s the historical data on geopolitical events from Ryan Detrick at Carson Research.
Energy, autos, and real estate led the market’s gains as oil prices surged and interest rates dropped. With negative sentiment around autos, Tesla rebounded +10.22% as the feud between CEO Elon Musk and President Trump cooled. Financial stocks declined by -2.6% and industrials fell -1.6% last week. Visa fell -4.7%, while Mastercard fell -4.8%.
Moderate data pushed interest rates down for most of the week, leaving the 10-year Treasury yield -11 bps lower. A softer-than-expected CPI report renewed calls for the Fed to lower rates. Jobless claims have risen, but the market forecast remains at two cuts in 2025. There is almost no chance of the Fed easing at this week’s FOMC meeting.
Economic Indicators and Earnings Commentary
Economic data showed slowing inflation. However, Israel’s attack on Iran quickly usurped those headlines. Headline CPI increased 0.1% m/m and core CPI rose 0.1% m/m. Service prices continue to drive inflation lower, especially apartment rentals and housing, which comprise around a third of core CPI. Continuing claims inched higher, suggesting ongoing labor market softening.
US consumer sentiment jumped to 60.5 in June, significantly exceeding May’s 52.2 and consensus forecasts.
Commodities and Currencies
Oil prices looking to have troughed the prior week, exploded higher by almost 8% on Friday due to Middle East instability. Brent crude, the global benchmark, jumped to $74/bbl, its highest level since early April. The hostilities threaten the roughly 1.5 MMBPD of sanction-skirting Iranian oil exports, much of which goes to China.
Gold rallied to new ATH over $3,400/oz.
Bitcoin rose to new ATH over $107,000.
Oak Harvest Weekly Stock Talk
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Past performance is no guarantee of future results. Indexes are unmanaged and one cannot invest directly in an index. They do not reflect any fees, expenses or sales charges. The preceding discussion is for informational purposes only. Investing involves risk and no reference to any security listed above should be considered a buy or sell recommendation. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser.
