June 16th, 2025
Market Performance:
The Middle East conflict shows no signs of slowing, but stocks climbed, and crude oil prices dipped early amid hopes the violence will remain contained. The market is rebounding after a turbulent Friday session that saw the S&P 500 drop more than 1% and oil surge over 7% amid rising geopolitical tensions between Israel and Iran. Most sectors in the S&P 500 started the day in the green, led by communication services and financials.
Economic Takeaways:
- Bond yields went higher with the 10-year Treasury yield starting the day just above 4.4%.
- The Cboe Volatility Index (VIX) dipped below 20 but stayed above last week’s lows. Futures trading implies the VIX may remain elevated above its long-term average through year-end, hinting at potential market turbulence ahead.
- Consumer spending continued to grow in 2025, though at a more moderate pace compared to prior years, with real personal consumption expenditures rising at a 1.2% annualized rate in the first quarter.
- Despite a 19% decline between February 19 and April 8, the S&P 500 has still managed to post a total return of just over 2% in 2025, including dividends.
- Bitcoin (/BTC) rose more than 1.5% early Monday, rebounding from Friday’s decline sparked by geopolitical tensions. Crypto-related stocks such as Coinbase Global (COIN) and MicroStrategy (MSTR) also gained between 1% and 2% in premarket trading. The crypto rally came as gold prices moved lower reversing the dynamic seen on Friday.
G7 Kicks Off
President Trump began a three-day series of meetings in Canada by declaring, “our primary focus will be trade,” though he arrived with little to show in terms of progress on his long-promised trade deals as the self-imposed “Liberation Day 2.0” deadline approaches.
“I’m a tariff person, I’ve always been a tariff person,” Trump said Monday at the start of the G7 summit in Kananaskis, Alberta, during a joint appearance with Canadian Prime Minister Mark Carney.
This meeting marked the start of a packed schedule for Trump, who is set to sit down with leaders from other key trade partners, including Germany, Mexico, the United Kingdom, and more in the coming days.
During Monday’s discussion with Carney, Trump described their relationship as strong but acknowledged a “different approach to trade.” He left the door open for a potential deal, stating of their differing views, “we’re going to look at both.”
His comments helped launch what’s expected to be a high-stakes week. While the broader G7 agenda will focus heavily on pressing security concerns — including the Israel-Iran conflict and the war in Ukraine — Trump emphasized that trade and tariffs remain a top priority for him.
U.S. Steel Shares Jump as Trump Greenlights Nippon Deal with Unprecedented ‘Golden Share’
U.S. Steel shares climbed roughly 5% after former President Donald Trump issued an executive order allowing the company to move forward with its merger with Japan’s Nippon Steel—under the condition that both parties sign a national security agreement with the U.S. government. The companies confirmed the agreement was signed, clearing up the final obstacle for the deal.
As part of the agreement, U.S. Steel disclosed that the U.S. government will receive a “golden share,” though the company did not specify the extent of the powers it grants.
Trump stated Thursday that the golden share gives the U.S. president “total control,” though he did not elaborate. In May, Republican Senator Dave McCormick of Pennsylvania told CNBC the share grants the government control over several board seats.
Commerce Secretary Howard Lutnick offered more detail in a Saturday social media post, saying the golden share provides the president with veto authority over major decisions. These include relocating U.S. Steel’s headquarters, moving the company or production abroad, renaming the firm, transferring jobs overseas, or closing or idling plants within certain timeframes.
Notables
- Tesla (TSLA) announced its raising prices on its Model S and Model X by $5,000, while also hinting at a robotaxi rollout planned for this weekend.
- Roku (ROKU) surged after revealing a partnership with Amazon (AMZN) Ads, granting marketers exclusive access to 80 million U.S. TV households.
- Shares of Hinge Health (HNGE) jumped after analysts began coverage with a bullish outlook.
- U.S. Steel (X) climbed nearly 5% following a CNBC report that former President Trump signed an executive order allowing the company’s merger with Japan’s Nippon Steel to proceed. Boeing (BA) gained 0.5% after Reuters reported resumed deliveries to China, as investors also look ahead to developments from this week’s Paris Air Show. However, the fallout from last week’s plane crash in India could keep Boeing, GE Aerospace (GE), and Spirit AeroSystems (SPR) under scrutiny.
- Visa (V), Mastercard (MA), and PayPal (PYPL) rebounded early after Friday’s sharp sell-off triggered by a Wall Street Journal report suggesting they could lose business if Amazon and Walmart move forward with stablecoin launches.
- Nvidia (NVDA) rose nearly 1%, leading a broader chip rally that saw names like Broadcom (AVGO), AMD (AMD), and Intel (INTC) gain between 1% and 2%. The rebound signals renewed investor risk appetite after tech stocks were dumped last week. Oppenheimer reiterated its Outperform rating on Nvidia in a bullish note Monday. Palantir (PLTR) also moved higher in early trading.
- Roku (ROKU) rallied 8% on confirmation of its Amazon ad sales partnership, according to Barron’s.
- Cisco Systems (CSCO) advanced nearly 2% after Deutsche Bank upgraded the stock to Buy from Hold, citing stronger visibility on sustainable mid-single-digit growth and AI-driven momentum.
- Defense stocks Lockheed Martin (LMT) and Northrop Grumman (NOC) extended Friday’s gains in premarket action amid heightened geopolitical tensions, potentially increasing demand for military hardware.
- Oil giants Exxon Mobil (XOM) and Chevron (CVX) slipped early following Friday’s rally tied to Middle East concerns. Crude oil prices pulled back in early trading.
- Travel stocks rebounded, with United Airlines (UAL) and Delta Air Lines (DAL) up over 1%, while cruise lines Norwegian Cruise Line (NCLH) and Carnival (CCL) rose between 1% and 2%. All had dropped sharply Friday amid fears of reduced travel demand stemming from Middle East unrest.
What’s Ahead
Several major central banks are holding policy meetings this week, including the Bank of Japan, Federal Reserve, Swiss National Bank, and Bank of England.
The Bank of Japan interest rate decision will come later today.
Household spending and monetary policy will take the spotlight this week, as investors await May retail sales data due Tuesday and the conclusion of the June FOMC meeting on Wednesday.
CarMax (KMX), Accenture (ANC), Darden Restaurants (DRI), and Kroger (KR) will end the week on Friday with their earnings.
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