Market Recap – Tuesday, June 17, 2025
Market Struggles Amid Geopolitical Tensions and Mixed Economic Data
US stocks closed lower today, although they did recover a bit from the worst levels. The Dow dropped by 0.70%, the S&P 500 fell 0.84%, and the Nasdaq was down 0.91%. The Russell 2000, which tracks smaller companies, lost 1.04%. Big tech stocks were all lower, with Tesla being one of the biggest losers. Other sectors that struggled today included solar energy companies (due to changes in a government bill), crypto, airlines, casinos, and biotech.
Key Market Sectors:
Winners: Energy stocks performed well, especially thanks to rising oil prices, as well as aerospace & defense, internet companies, steel, food, casual dining, and nuclear energy stocks.
Laggards: Some of the worst-performing sectors were solar, regional banks, pharma, and biotech. Tesla, in particular, saw a significant drop.
Other Market Factors:
Treasuries: Bond prices were up, pushing down yields, especially on longer-term bonds.
Oil: Crude oil prices rose by 4.3%, partly due to concerns over the ongoing Middle East tensions, though oil exports remain unaffected.
Dollar and Gold: The dollar strengthened by 0.8%, while gold prices fell slightly by 0.3%. Bitcoin dropped by 3.3%.
Geopolitical and Economic News:
Tensions between Israel and Iran were a major concern today. There were reports that President Trump might be considering further military action to stop Iran’s nuclear program. While these tensions affected market sentiment, the impact was relatively muted, with stocks only dipping modestly. However, the market is still sensitive to developments in the region, especially if oil supplies are disrupted.
In the US, economic data showed weaker-than-expected retail sales in May, which fell 0.9% compared to expectations of a smaller decline. Industrial production also dropped by 0.2%. On a more positive note, the housing market index showed that the US housing market is slowing down, with buyers stepping back.
Notable Stock Moves:
Verve Therapeutics (VERV): The stock surged by 81.5% after the company agreed to be acquired by Eli Lilly for around $1 billion.
Wiley (WLY): Rose 10% after beating earnings expectations and providing strong future guidance.
Jabil (JBL): Gained 8.9% after reporting strong results across key markets, especially in cloud computing and AI demand.
Reddit (RDDT): Jumped 6.1% after launching new AI-powered tools.
Decliners:
First Solar (FSLR): Fell 17.9% after news that the US Senate’s budget plan will phase out energy credits for solar and wind by 2028.
JetBlue Airways (JBLU): Dropped 7.9% after announcing cost-cutting measures due to softer-than-expected travel demand.
Tesla (TSLA): Fell 3.9% after news that the company will pause production of its Cybertruck and Model Y vehicles for a week.
Asian Market Outlook:
Asian markets are expected to open lower on Wednesday, with futures indicating declines in Japan, Hong Kong, and Australia. Oil prices continue to rise due to the ongoing Middle East tensions. The US Federal Reserve is expected to leave interest rates unchanged at its meeting tomorrow, but the focus will be on any changes in future rate guidance.
Here's Our Take
Today's market weakness was largely driven by escalating geopolitical tensions in the Middle East, with investors still wary of the potential disruptions to oil markets. Despite this, broader market declines remained relatively contained, with notable strength in energy and defense stocks. The weaker-than-expected retail sales and industrial production numbers suggest that the economy is facing headwinds, though there are still pockets of strength, particularly in certain sectors like food, steel, and casual dining. As we head into tomorrow’s Federal Reserve meeting and look forward to economic data in the coming weeks, the market will likely remain sensitive to both domestic economic conditions and geopolitical developments.
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