Weekly Market Insights | Conflict Fears Rattle Markets; Fed Holds Steady

Stocks were mixed during the holiday-shortened trading week as uncertainty over conflict in the Middle East weighed on investors.

The Standard & Poor’s 500 Index slipped by 0.15 percent closing the week out at 5,967.84 whichs puts it up 1% for the month and about 1.5% this year. The Nasdaq Composite Index rose by 0.21 percent closing the week at 19,447.41. The Dow Jones Industrial Average was flat (+0.02 percent). The MSCI EAFE Index, which tracks developed overseas stock markets, declined 1.54 percent.^1,2

Stocks Rise, Then Slump

Stocks opened higher, and oil prices fell at the start of the week as investors hoped Middle Eastern tensions would ease.³

However, as investors parsed through updates on the conflict, stocks fell over ongoing uncertainty. Conflicting statements from those involved, as well as from world leaders, contributed to the uncertainty.⁴

Midweek, stocks rallied ahead of the Fed's interest rate decision. The Federal Reserve on Wednesday kept its benchmark lending rate unchanged for a fourth straight meeting to 4.25 percent and 4.5 percent while sticking to its federal funds rate outlook for 2025 amid higher inflation expectations. Policymakers continue to see the median federal funds rate at 3.9% at the end of this year, indicating potential easing in 2025. They raised their 2026 rate outlook to 3.6% from 3.4% projected in March and to 3.4% from 3.1% for 2027. Following the decision, Fed Chair Powell said policymakers are “well positioned to wait” before moving on short-term rates. 

Powell indicated that trade policy has clouded the inflation outlook, making policymakers concerned about consumer prices.^7,8  I've been critical of the Fed Chair Jerome Powell and often have remarked that his either rate hiking or rate cutting decisions have been at the wrong time and often linked to politics despite his representation that he and his office are not political. It isn't difficult to see that his track record hasn't been good.

By the way, markets seemed to dismiss news that housing starts dropped unexpectedly to their lowest level in five years.  Again, begin lowering rates Chairman Jerome Powell - You are late in doing so - another Fed policy error.  That's five over the past seven years contributing to five cyclical bear markets.  Wednesday, Fed-Head day's trading session was slightly down ahead of Thursday's stock market holiday.  

The health care sector had the largest percentage drop of the week, falling 2.7%, followed by a 1.7% drop in communication services and a 1.2% loss in materials. Utilities, consumer discretionary, real estate, consumer staples and industrials also declined.

Decliners in health care included shares of Eli Lilly (LLY), which fell 6.9%. The company said it was planning to appeal against the UK's National Institute for Health and Care Excellence's, or NICE's, decision not to reimburse the cost of Alzheimer's drug Kisunla under the National Health Service. The drugmaker said the regulator's decision is "unreasonable" based on the evidence submitted by the company, clinical experts and patient groups.

Google parent Alphabet's (GOOG, GOOGL) shares led the drop in communication services, falling 4.6%. Google suffered a setback after the European Court of Justice's advocate general recommended that the court dismiss the tech giant's appeal to overturn an antitrust fine of 4.12 billion euros ($4.75 billion). Google is also under investigation by Turkish competition authorities for allegedly using its Performance Max advertising platform to unfairly extend its dominance in the online advertising market.

In materials, Steel Dynamics (STLD) shares shed 5.7% as the steel producer forecast fiscal Q2 earnings below analysts' expectations.

Energy had the largest percentage increase on a weekly basis, climbing 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. Gainers included EQT (EQT), which rose 6.3%, and Valero Energy (VLO), up 5.2%.

Jabil (JBL) was the top performer in the technology sector, jumping 17% on the week as the company reported Q3 diluted core earnings and revenue ahead of analysts' consensus expectations and raised its fiscal 2025 outlook.

Among financials, Coinbase Global (COIN) shares soared 27%. The company said it has secured the Markets in Crypto Assets license from the Luxembourg Commission de Surveillance du Secteur Financier. Coinbase said the license allows it to provide crypto products and services to all 27 European Union member states.

Following the holiday, anxious investors refocused on geopolitical tensions and developments. As the week closed out, investors appeared to take a risk-off approach heading into the weekend.⁶

The Fed Holds Rates Steady

Economic data will include May existing, pending and new home sales; the second revision to Q1 gross domestic product; and the May personal consumption expenditures index, a closely watched inflation measure.

This Week: Key Economic Data

Monday: Manufacturing and Services PMI. Existing Home Sales.

Tuesday:S&P Case-Shiller Home Price Index. Cleveland Fed President Beth Hammack speaks. Consumer Confidence. Fed Chair Powell Testifies to House Financial Services Committee.

Wednesday: New Home Sales.

Thursday: Gross Domestic Product (GDP). Retail & Wholesale Inventories. Trade Balance. Durable Goods. Cleveland Fed President Beth Hammack speaks. Pending Home Sales.

Friday: Personal Consumption & Expenditures (PCE) Index. Consumer Sentiment.

^{Source: Investors Business Daily - Econoday economic calendar; June 20, 2025
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.}

This Week: Companies Reporting Earnings

Tuesday:  FedEx Corporation (FDX)

Wednesday:  Micron Technology, Inc. (MU), Paychex, Inc. (PAYX)

Thursday:  NIKE, Inc. (NKE)

^{Source: Zacks, June 20, 2025. Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.}

“Music’s for grooving man, and music’s not for puttin’ yourself through bad changes, y’know?”

– Janis Joplin

How Tax Transcripts Can Help You File an Accurate Tax Return

The IRS has a few resources to help you file an error-free return. They suggest making an online account to see estimated tax payments, prior year adjusted gross income, and more. 

They also offer the option to request a tax transcript online. There are five types of tax transcripts, each used for different purposes, so make sure to see which one best fits your needs. A Tax Return Transcript, for example, shows most line items from your original Form 1040. You can request a tax transcript online, by mail, or by phone. 

This information is not a substitute for individualized tax advice. Please discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS⁹

Meet The World’s Easiest Brussels Sprout Salad

Eating healthy can be delicious with recipes like this shaved Brussels sprout salad! You only need a few ingredients to bring it all together. 

You’ll need:

• 4 cups shaved Brussels sprouts

• ¼ cup extra-virgin olive oil (and a bit more for a drizzle on top)

• ¼ cup fresh lemon juice

• ½ cup pine nuts

• ⅓ cup dried cranberries

• ⅓ cup grated pecorino cheese

• ⅓ cup chopped chives

• Sea salt and pepper to taste

To make this salad, all you have to do is thinly slice the Brussels sprouts with a mandoline (or a knife if you don’t have one), then place them in a bowl with the olive oil, lemon juice, pine nuts, cheese, chives, and a sprinkle of salt and pepper to taste. Toss everything together, then drizzle with more olive oil to serve.

Tip adapted from Love and Lemons¹⁰

What do the words civic and level have in common?

Last Week's Riddle: There are two of them; one can usually see what the other sees, but they can never see each other. What are they?
Answer: Eyes.

African  Elephants
Amboseli National Park, Kenya

Footnotes and Sources

^{1. WSJ.com, June 20, 2025}

^{2. Investing.com, June 20, 2025}

^{3. MarketWatch.com, June 16, 2025}

^{4. CNBC.com, June 17, 2025}

^{5. WSJ.com, June 18, 2025}

^{6. CNBC.com, June 20, 2025}

^{7. MarketWatch.com, June 16, 2025}

^{8. WSJ.com, June 18, 2025}

^{9. IRS.gov, December 5, 2024}

^{10. Love and Lemons, December 12, 2024}

^{11. Provided by MT Newswires, YCharts.com, Jun. 23- 29, 2025}