2025 Week 25

1. Geopolitical Tensions Disrupt Markets

U.S. markets declined last week, with all major indexes closing in negative territory. The Dow dropped over 1%, while the S&P 500 and NASDAQ registered slight losses. The selloff was sparked by geopolitical unrest after Israeli military action targeted Iranian nuclear sites, escalating tensions in the Middle East and raising market uncertainty.

Key Takeaway: Rising geopolitical risks rattled investor confidence and reversed recent market gains.

2. Oil Prices Surge on Supply Concerns

Crude oil spiked more than 7% Friday, closing the week nearly 12% higher around $73 per barrel—the highest since mid-February. The rally followed concerns of supply disruptions after the Israeli strikes, reigniting inflationary fears and uncertainty about energy costs.

Key Takeaway: Oil’s sharp rebound underlines its sensitivity to geopolitical shocks and inflationary risk.

3. Inflation Slows Despite Tariff Pressures

The May Consumer Price Index rose just 0.1% month-over-month, with the annual rate steady at 2.4%, close to April’s four-year low. This soft inflation data came even as higher tariffs remained in effect, suggesting companies are managing cost pressures through inventory buffers or absorbing price increases.

Key Takeaway: Inflation remains muted, suggesting current tariff impacts are being managed effectively.

4. Treasury Yields Stabilize

Investor demand for long-term U.S. Treasuries surged, with the 30-year bond auction drawing yields below market expectations at 4.84%. This marks a relief from recent highs above 5.00%, easing concerns over escalating borrowing costs and fiscal stability.

Key Takeaway: Strong Treasury demand helped stabilize long-term yields and calm debt market nerves.

5. Gold Breaks New Highs

Gold resumed its rally, rising to approximately $3,450 per ounce on Friday—a new all-time high. The metal has gained over 30% year-to-date, fueled by safe-haven flows amid global uncertainty and persistent central bank buying.

Key Takeaway: Gold’s record-setting run reflects growing investor caution and demand for defensive assets.

6. Trade Talks Progress with China

U.S.-China trade discussions advanced with a preliminary framework agreement that reduces some tariffs and addresses non-tariff barriers. While still pending presidential approvals, the deal marks progress, particularly on rare-earth access and aviation exports.

Key Takeaway: U.S.-China trade relations improved with a tentative framework that may temper economic friction.

7. Consumer Sentiment Rebounds

Consumer sentiment rebounded sharply in June, with the University of Michigan index rising from 52.2 to 60.5. The jump—beating expectations—was driven by waning inflation fears and optimism about job stability and wage growth.

Key Takeaway: U.S. consumers are showing renewed confidence, which bodes well for near-term spending resilience.

8. Fed Holds Steady but Cuts Still Possible

The Federal Reserve left rates unchanged in its June meeting. However, futures markets signal strong expectations for rate cuts by year-end, with investors pricing in up to three quarter-point reductions. Moderating inflation and stable labor data support the dovish outlook.

Key Takeaway: The Fed remains on hold, but markets anticipate easing later in the year as inflation stays contained.

Next week, markets will assess the first round of Q2 earnings and monitor signals from global central banks on rate policy trajectories.

‍