Weekend Update, June 23rd, 2025

Stocks Pause, Nuclear Sites Bombed

Index, Sector, and Asset Performance

The S&P 500 index slipped -0.2% last week as gains in the energy, technology, and financial sectors were outweighed by industrial and healthcare declines. Healthcare fell – 2.7%, followed by a -1.7% drop n communication services and a -1.2% loss in materials. The S&P 500 ended Friday at 5,967. It is up +1% for June and +1.5% year-to-date.

This Monday morning, after the U.S. bombed Iran’s nuclear facilities, most market moves are rather mild. Middle Eastern markets closed higher, while Europe’s losses range from -0.7% to +0.1%. Asia’s was mixed, with China’s markets all closing up (Shanghai Composite +0.7%, CSI 300 +0.3%), while Japan’s slipped -0.1%. Oil is higher by only +0.5% to $77.42/bbl, but that is down from 5-month highs of $81.40 reached earlier. There are conflicting reports on whether the Strait of Hormuz will be closed. 20% of the world’s oil passes through this body of water. Iran’s parliament voted to shut it down, but the markets are waiting to see if there is follow-through.

Before selling indiscriminately, here’s the historical data on geopolitical events from Ryan Detrick at Carson Research.

Declines in health care included shares of Eli Lilly (LLY) fell -6.9%. The company was planning to appeal a decision not to reimburse the cost of Alzheimer’s drug, Kisunla, under the National Health Service.

Google parent Alphabet’s shares led the drop in communication services, falling -4.6%. In materials, Steel Dynamics fell -5.7% as the steel producer’s forecast for fiscal Q2 earnings was below analysts’ expectations.

Energy had the largest percentage increase on a weekly basis, climbing to +1.1%, followed by a +0.9% rise in technology and a 0.8% increase in financials. The energy climb came as crude oil futures rose amid turmoil in Iran. Valero Energy was up +5.2%.

Economic Indicators and Earnings Commentary

The Fed kept its benchmark lending rate unchanged for a fourth straight meeting while sticking to its rate outlook for 2025 amid higher inflation expectations. Recall that Fed Funds Futures (investors wagering on what the Fed thinks might happen, have historically no predictive market value outside of 5-7 days in advance of a Fed meeting). The “dot-plot” median federal funds rate sits at 3.9% at the end of this year, indicating 2+ cuts in 2025.

Commodities and Currencies

Gold was flat.

Bitcoin pulled back toward $100,000

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.