Weekly Market Recap: Geopolitical Tensions, Fed Signals, and Mixed Market Performance

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Index Update:  President Trump indicated that a decision on striking Iran could take up to two weeks, leaving room for possible negotiations, though tensions remained high with continued Israeli strikes on Iranian nuclear sites. This uncertainty kept investors cautious toward riskier equities, while energy producers faced pressure as oil price gains eased. Meanwhile, CarMax was set for a strong market open after reporting solid results, and investors prepared for potential volatility ahead of the triple witching session.

Market Movers:  On Wednesday, the top gainers were Aptevo Therapeutics Inc (+81.91%), followed by LZ Technology Holdings Limited (+53.80%). On the contrary Caris Life Sciences, Inc (-50.00%) and CERo Therapeutics Holdings, Inc (- 42.01%) declined the most the same day.

Commodities Update:  Oil prices advanced for a third consecutive week, driven by fears of supply disruptions amid intensifying hostilities between Israel and Iran. Despite the escalating conflict, with Israel targeting key sites in Tehran, Iran continued strong crude exports. A sharp drop in U.S. crude inventories further supported both WTI and Brent crude prices. Gold prices declined, marking their first weekly loss in three weeks as investors sold bullion to cover losses elsewhere amid rising geopolitical tensions. Market focus also remained on the Federal Reserve’s steady rates, signals of potential cuts later this year, and concerns that persistent inflation could limit monetary easing, putting pressure on non-yielding assets like gold.

Macro Update:  The U.S. dollar index dipped slightly but stayed on course for a weekly gain, supported by safe-haven demand amid the Israel-Iran conflict and the risk of U.S. involvement. The Federal Reserve kept rates steady, signaled a cautious stance, and highlighted inflation concerns linked to tariffs, while projecting two rate cuts in 2025 alongside a weaker growth outlook. Investors awaited key economic data for further direction.

Bonds Commentary:  The 10-year U.S. Treasury yield hovered near 4.39% as investors balanced geopolitical tensions and economic uncertainty. Safe-haven demand kept yields subdued amid rising risks from the Israel-Iran conflict and potential U.S. involvement. Meanwhile, the Federal Reserve held rates steady, signaled a cautious approach, and projected rate cuts in 2025 alongside weaker growth and higher inflation concerns.

Futures Update:  U.S. stock index futures declined, wrapping up the week on a subdued note as investors kept a close watch on the ongoing conflict between Israel and Iran. Wall Street had been cautious, with limited major moves, partly due to the Juneteenth holiday. The S&P 500 posted a slight gain for the week, while the Dow edged lower and the Nasdaq recorded a modest advance.

Stocks experienced a consolidation on Wednesday's trading session, correcting in the second half after some momentum. The S&P 500 fell by 1.87 points, or 0.03%, closing at 5,980.86. From a technical analysis standpoint, the index is currently near a convergence point and encountering resistance from a trendline, implying a potential period of consolidation in the near term, as previously noted. However, the index remains above its key exponential moving averages, which supports a cautiously optimistic outlook and suggests these levels could act as near-term support. The main support level is around 5,888, with resistance expected near 6,066.