Weekend Sum Up and the Week Ahead
U.S. equities slipped on Friday as President Trump postponed a decision on U.S. involvement in the Israel-Iran conflict by two weeks, signaling a window for continued diplomacy. Energy and consumer staples led the day’s gains, while communication services and materials dragged the broader market lower.
Overseas, Asian markets ended mixed after China’s central bank kept its one-year loan prime rate unchanged at 3.0%, in line with expectations. European markets moved higher, shrugging off an unexpected decline in the eurozone’s preliminary consumer confidence for June.
The U.S. dollar weakened against major global currencies. In commodities, WTI crude climbed as ongoing airstrikes between Israel and Iran fueled fears of supply disruptions.
Wall Street will remain focused on the Iran-Israel conflict next week, as equities stay stuck in a holding pattern.
Trade Update
On the trade front, there wasn’t a lot of news this last week as negotiations between the U.S. and the E.U., Japan and other global players are still ongoing. July 9th had marked the end of the 90-day tariff pause window, but U.S. Treasury Secretary Scott Bessent has stated that the July 9th deadline may be extended for 18 trading partners involved in good-faith negotiations.
Economic Data
FOMC Meeting: As widely anticipated, the Federal Reserve left the Fed Funds rate unchanged at 4.25%–4.50%, with Chair Jerome Powell maintaining a cautious tone on the timing of potential rate cuts. The updated dot plot reflected higher inflation expectations — headline PCE was revised up to 3.0% from 2.7%, citing ongoing trade uncertainty. The Fed also raised its unemployment projection for 2025 to 4.5% (from 4.4%) and lowered its GDP growth forecast to 1.4%, down from 1.7% in March.
Retail Sales: Headline retail sales fell 0.9% month-over-month (MoM), missing expectations for a 0.6% decline. However, the control group — which strips out food services, auto dealers, and gas stations — rose 0.4%, beating the 0.3% estimate and rebounding from a -0.2% reading in the prior month.
Leading Economic Indicators (LEI): Came in at -0.1%, slightly better than the expected -0.3%.
Building Permits: Fell to 1.393 million, down from 1.422 million in the previous month and below the 1.400 million estimate.
Housing Starts: Dropped 9.8% from the previous month to 1.256 million, significantly missing the 1.350 million forecast.
NAHB Housing Market Index: Declined to 32 from 34, marking the third-lowest level since 2012.
Initial Jobless Claims: Fell to 245,000 from the prior week’s revised 250,000, in line with expectations. Continuing claims edged down by 6,000 to 1.941 million.
Atlanta Fed GDPNow: The Q2 GDP estimate was revised slightly lower to +3.4% on June 18 from +3.5% the day before.
Cryptocurrency Update
Last week the U.S. Senate passed the GENIUS Act — a major stablecoin bill — with strong bipartisan support in a 68-30 vote. The legislation sets federal standards for U.S. Dollar-pegged stablecoins, introduces consumer protections, and outlines a regulatory framework for private companies seeking to issue them.
Under the bill, stablecoins must be fully backed by liquid assets such as U.S. dollars or short-term Treasuries. Issuers would also be subject to monthly audits and required to comply with anti-money laundering (AML) regulations.
The measure now heads to the Republican-controlled House of Representatives before potentially reaching President Trump’s desk to be signed into law.
How Will the Market Move? Things Look Hazy.
The level of uncertainty right now makes any confident prediction nearly impossible.
Federal Reserve Chair Jerome Powell summarizes it well given that he used some form of the word “uncertain” nearly 20 times during his post-meeting press conference last Wednesday.
Wall Street professionals had been hoping Powell and the Fed might offer some direction amid a landscape filled with risks — from escalating conflict in the Middle East to intensifying U.S.-China trade tensions. Instead, the message was a clear “we don’t know,” as the central bank signaled it’s still in a holding pattern when it comes to easing interest rates.
“Right now it’s just a forecast in a very foggy time,” Powell said, following the central bank’s decision to slightly lower its short-term growth outlook while raising its inflation expectations. The Fed left its guidance unchanged, still anticipating at least two rate cuts before the end of the year.
The latest “dot plot,” which maps the individual rate projections of 19 Fed officials, points to two quarter-point cuts in 2025 — but it came close to signaling just one. Just a single vote in the other direction would have changed the median projection.
The outlook for 2026 was equally uncertain. The median projection currently reflects one rate cut next year, but if just one policymaker had shifted their stance, that number could have jumped to three.
All Eyes on Fedex
FedEx (FDX) is scheduled to release its fourth-quarter earnings for fiscal 2025 after markets close on Tuesday. Analysts remain generally optimistic about the stock, anticipating higher profits despite a slight decline in revenue.
According to data from Visible Alpha, 12 of the 14 analysts covering FedEx rate it a “buy,” with the remaining two assigning a “hold” or equivalent. The average price target stands at $281 — roughly 24% above Friday’s closing price. Still, FedEx shares are down nearly 20% year-to-date.
For the quarter, analysts expect revenue to dip just over 1% year-over-year to $21.82 billion. However, adjusted earnings per share are forecast to rise more than 8% to $5.88, driven in part by ongoing cost-cutting initiatives.
Last quarter, FedEx missed expectations and lowered its full-year guidance for the third straight time, citing a “very challenging operating environment.”
While sentiment for the near term remains positive, analysts at UBS and Morgan Stanley have raised concerns about the impact of tariffs on shipping demand heading into fiscal 2026.
UBS recently lowered its price target on FedEx to $311 from $331, citing expectations for softer volume and revenue growth, as well as less margin improvement across both its Express and Freight segments.
Morgan Stanley analysts echoed that caution, maintaining an “underweight” rating and pointing to increased uncertainty stemming from trade policy risks.
What to Watch Ahead:
Economic:
- Monday (6/23): Existing Home Sales
- Tuesday (6/24): Consumer Confidence, Current Account Balance, FHFA Housing Price Index, S&P Case-Shiller Home Price Index
- Wednesday (6/25): EIA Crude Oil Inventories, MBA Mortgage Applications Index, New Home Sales
- Thursday (6/26): Advanced International Trade in Goods, Advanced Retail Inventories, Advanced Wholesale Inventories, Continuing Claims, Durable Goods, EIA Natural Gas Inventories, GDP – 3rd Estimate, Initial Claims, Pending Home Sales
- Friday (6/27): PCE Prices, Personal Income, Personal Spending, University of Michigan Consumer Sentiment – Final
Earnings:
- Monday (6/23): FactSet Research Systems Inc. (FDS), Commercial Metals Co. (CMC), KB Home (KBH)
- Tuesday (6/24): Carnival Corp. (CCL), TD Synnex Corp. (SNX), FedEx Corp. (FDX), AeroVironment Inc. (AVAV), Worthington Enterprises Inc. (WOR), BlackBerry Ltd. (BB)
- Wednesday (6/25): Paychex Inc. (APYX), General Mills Inc. (GIS), NovaGold Resources Inc. (NG), Winnebago Industries Inc. (WGO), Micron Technology Inc. (MU), Jefferies Financial Group Inc. (JEF), Levi Strauss & Co. (LEVI), H.B> Fuller Company (FUL)
- Thursday (6/26): McCormick & Company Inc. (MKC), Walgreens Boots Alliance Inc. (WBA), Acuity Inc. (AYI), Lindsay Corp. (LNN), Nike Inc. (NKE), National Beverage Corp. (FIZZ), Concentrix Corp. (CNXC)
- Friday (6/27): Apogee Enterprises Inc. (APOG), GreenPower Motor Company Inc. (GP)
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