The Midday Market Roundup for Tuesday, June 17, 2025

Here are the four key developments shaping global markets and economies as of midday today:

1. Geopolitical Tensions Drive Oil Prices Higher, Weigh on Equities

Escalating Middle East hostilities between Israel and Iran are significantly impacting the markets. Israel’s evacuation warning for Tehran residents has pushed oil prices up over 1%, with Brent crude nearing $110 per barrel. This has led to a rally in energy stocks, while airlines and defense contractors are facing pressure. U.S. equities have slipped modestly, with the S&P 500 down 0.3% and the Nasdaq falling 0.6%, as investors seek safety in Treasuries and gold. Analysts are warning that a prolonged conflict could disrupt global energy supplies and inflation trends.

2. Federal Reserve Holds Steady Amid Mixed Economic Signals

The Federal Reserve, in a cautious move, began its two-day policy meeting, widely expected to keep rates unchanged at 4.25–4.50%. This steady approach is in response to mixed economic signals, particularly after May’s weaker-than-expected retail sales (-0.9% month-over-month) and rising import prices. Markets will be closely watching Chair Powell's post-meeting remarks for any hints on future cuts. Despite stable inflation and a resilient labor market, concerns about stagflation persist as growth slows. The Fed's careful stance is a reassuring sign of the stability of the economy.

3. Foreign Central Banks Reduce Exposure to U.S. Assets

Central banks worldwide are quietly shifting away from U.S. Treasuries and dollar-denominated holdings, according to custody data. This trend aligns with broader de-dollarization efforts driven by geopolitical shifts and the dollar’s recent decline in value. The 10-year Treasury yield dipped to 4.42%, reflecting reduced demand, while the dollar index held near a three-year low. This trend in foreign central banks' investment strategies provides valuable insight into the global market dynamics.

4. Corporate Moves: Mergers, Tariffs, and Sector Volatility

•               U.S. Steel surged 5% after President Trump approved its merger with Japan’s Nippon Steel.

•               Solar stocks fell sharply after Senate proposals to phase out tax credits by 2028.

•               Boeing rose 0.5% amid resumed China deliveries, though safety concerns persist following last week’s Air India crash.

Disclosure

This article is for informational purposes only and does not constitute financial advice or an offer to buy/sell securities. Information is based on publicly available sources and subject to change. Consult a qualified financial advisor before making investment decisions. The author and publisher hold no positions in the mentioned securities.

Sources

https://www.reuters.com/markets/
https://www.cnbc.com/2025/06/17/asia-stock-markets-today-live-updates-for-june-17-2025.html
https://www.stl.news/global-markets-react-rising-tensions-june-17-2025/
https://www.nytimes.com/2025/06/17/business/federal-reserve-interest-rates.html
https://www.nasdaq.com/articles/stocks-fall-chances-dim-early-end-israel-iran-war
https://www.reuters.com/markets/europe/foreign-central-banks-are-shrinking-us-asset-exposure-2025-06-17/
https://www.investopedia.com/dow-jones-today-06172025-11755942
https://www.usnews.com/news/us/articles/2025-06-17/oil-prices-rise-and-us-futures-fall-as-israel-urges-residents-of-irans-capital-to-evacuate
https://www.schwab.com/learn/story/stock-market-update-open

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