Why do Markets remain unshaken 17/06/2025

HOT stories for today

US market wrap:

• Markets surged following a weekend characterized by widespread protests and celebratory parades, catalyzed by reports indicating that Iran was initiating diplomatic overtures toward the United States in an effort to broker a ceasefire with Israel. This sharp shift in sentiment occurred mere days after a flurry of intense aerial combat involving drones, ballistic missiles, and fighter jets. Beyond the tentative optimism for a potential de-escalation, investors are also turning their attention to the opening of the G7 summit in Alberta, Canada, and the forthcoming Federal Open Market Committee (FOMC) meeting.
• While a rate cut is widely deemed unlikely, market participants are anticipating a revised “dot plot” that could offer fresh insight into the Federal Reserve’s economic projections. Yet, prospects for a sustained peace are rapidly fading. Both Iran and Israel have announced fresh strikes as the conflict stretches into its fourth day. Heightening geopolitical uncertainty further, former President Trump has announced an early departure from the G7 summit, citing the escalating crisis in the Middle East. In a statement posted Monday evening on Truth Social, he called for the immediate evacuation of Tehran.

Why do Markets remain unshaken?

• Despite rising tensions between Israel and Iran, spiking oil prices, U.S. trade war threats, and a worsening fiscal outlook, global equity markets remain near record highs. According to strategist Tom Essaye, investors are largely unfazed due to a mix of geopolitical desensitization, muted inflation fears, and continued faith in the resilience of the U.S. economy.
• Essaye notes that Iran’s reduced military and oil-exporting capacity has limited market concern over escalation, while “tariff fatigue” has made investors dismissive of Trump’s trade threats. Meanwhile, long-term bond yields remain surprisingly stable, indicating little immediate worry over U.S. debt. And although signs of economic slowdown are emerging, recent history suggests markets are still willing to give policymakers the benefit of the doubt — for now.

Stocks on the move:

• Roku Inc. (ROKU) shares jumped over 10% following the announcement of an exclusive collaboration with Amazon Ads, which will allow advertisers to reach 80 million U.S. connected TV households through Amazon’s demand-side platform (DSP).
• Advanced Micro Devices Inc. (AMD) surged nearly 10% intraday, reaching a six-month high after several analysts raised their price targets, driven by optimism surrounding the company’s latest AI product launches and increased enterprise adoption.
• CoreWeave Inc. (CRWV) has skyrocketed approximately 290% since its March IPO. However, Bank of America downgraded the stock from “Buy” to “Neutral,” citing valuation concerns—despite simultaneously raising the price target to $185.
• Celsius Holdings Inc. (CELH) rallied more than 6% after TD Cowen upgraded the stock from “Hold” to “Buy” and lifted its price target from $37 to $55, pointing to strong sales momentum and successful strategic expansion initiatives.

                                   Watchlist: CRWV, AMD, ROKU, CELH, JBL, COIN, NVDA, MSFT



Today’s action

• Asia-Pacific markets were mixed on Tuesday as investors weighed escalating tensions between Israel and Iran, following U.S. President Donald Trump's call for a swift evacuation of Tehran. Meanwhile, the Bank of Japan left its benchmark interest rate unchanged at 0.5%, citing ongoing global uncertainty. Japan’s Nikkei 225 rose 0.58%, while South Korea’s Kospi edged up 0.24% and the Kosdaq held steady. China’s CSI 300 slipped 0.15%, and Hong Kong’s Hang Seng dipped 0.12%. In the U.S., stock futures traded lower Monday evening. Dow futures fell nearly 200 points (–0.5%), S&P 500 futures declined 0.5%, and Nasdaq 100 futures were down about 0.6%. Investors now await key U.S. retail sales data for May and the Federal Reserve’s policy decision on Wednesday, which is expected to offer new guidance on interest rate trajectories.

Bitcoin

• Bitcoin dropped sharply late Monday, falling over $2,000 from its intraday high amid renewed Middle East tensions. The move followed reports that former U.S. President Donald Trump left the G7 summit early and called advisers to the White House Situation Room over concerns about Tehran. 
• After reaching $108,780 earlier in the day, Bitcoin dipped to $106,421 before staging a modest recovery. The cryptocurrency remains in a range-bound pattern established in May, holding above the key $100,000 level.
  Watchlist: Bitcoin: 100,000-112,000, Ethereum: 1500- 2800, Solana: 80-183

Forex

• The euro climbed to 1.1572 against the U.S. dollar on Tuesday, as markets shrugged off renewed missile attacks on Israel. A softer U.S. dollar and dovish Federal Reserve sentiment—reinforced by weak Empire State Manufacturing data—helped buoy EUR/USD. Risk appetite improved amid signs the Israel-Iran conflict may remain contained, supporting the shared currency ahead of the Fed’s June 18 policy meeting.
• Meanwhile, the Japanese yen weakened slightly after the Bank of Japan left interest rates unchanged at 0.50%, as expected. USD/JPY remained supported by modest dollar strength, with traders awaiting comments from BoJ Governor Kazuo Ueda for further policy guidance.
  Watchlist: EUR/USD: 1.0700-1.1650, USD/JPY: 140-151

Basic Materials

• Gold (XAU/USD) slipped for a second consecutive day on Tuesday, failing to hold an earlier advance above the $3,400 level. Modest strength in the U.S. dollar weighed on the non-yielding asset, though losses were cushioned by heightened geopolitical tensions in the Middle East and expectations of Federal Reserve rate cuts in 2025.
• Meanwhile, West Texas Intermediate (WTI) crude extended its rally, trading near $70.60 in the Asian session. The ongoing Israel-Iran conflict continues to support oil prices. Investors are also eyeing U.S. retail sales data and the American Petroleum Institute’s weekly crude inventory report, both due later Tuesday.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-72.50
  
   

Key Economic Events Today:

EST time
08:30 am: USD Core Retail sales, Retail sales
08:30 am: USD Import Prices
09:15 am: USD Industrial Production
10:00 am: USD Business Inventories
10:00 am: USD NAHB Housing Market Index


Earnings

BMO (Before Market Open)
JBL          Jabil Inc
WLY        John Wiley and Sons
TEN         Tsakos Energy Navigation Ltd.
AMC (After Market Close): LZB

The TEFS Analyst team wishes you a successful day!