Stocks took a hit this week as tensions in the Middle East escalated, while investors remain hopeful that the Federal Reserve will cut interest rates soon. The Dow Jones Industrial Average (DJIA) dropped 1.32% for the week, followed by a 0.39% decline in the S&P 500 and a 0.60% fall in the Nasdaq-100.
Initially, stocks rose as better-than-expected economic data and strong tech shares lifted investor spirits. However, a flare-up in Middle East tensions led to a re-intensification of geopolitical risk, pulling markets lower. Oil prices surged on Friday as Iran sent missiles into Israeli cities after Israeli airstrikes hit Iranian nuclear and military facilities.
The Federal Reserve’s rate policy meeting this week has been influenced by the shift in global oil prices. A total production shutdown in Iran could push oil prices above $100 per barrel, potentially spiking them up to $130 if the Strait of Hormuz is disrupted. Despite a strengthening US dollar, which can act as a counterweight to inflation through lower import costs, the impact is limited.
The futures markets suggest no change in Fed rates at this meeting, with only marginal chances for a July cut. However, the central bank’s path to interest rate cuts starting in September appears to have widened.
Key economic events this week include May’s Retail Sales, Industrial Production, and Building Permits and Housing Starts. These reports will provide insight into consumer spending, industrial production, and housing demand, which can affect the overall economy and portfolio performance.
Source: https://www.tipranks.com/news/3-economic-events-that-could-affect-your-portfolio-this-week-june-16-20-2025