Closing Recap 

U.S. stocks sank to session lows late Friday, capping a volatile week, as escalating geopolitical tensions between Iran and Israel overshadowed earlier optimism from US-China trade progress and a softer-than-expected US CPI print. Bitcoin’s recent rally also showed signs of pausing.

Key Takeaways

• Geopolitical Turmoil Dominates: Explosions over Israel, attributed to Iranian missile retaliation for Israeli attacks on Iran’s Natanz nuclear site and military commanders, sent shockwaves through markets late Friday. 
• Stocks End Week Lower: Major US indices fell sharply on Friday’s geopolitical news, reversing earlier gains. 
• Safe Havens Surge: Gold prices jumped significantly (+$50 Friday), oil prices soared (WTI +7.3%, Brent +7.0% Friday), and the US dollar gained broadly as investors fled to safety. Treasury prices initially rose (yields fell) before reversing. 
• US CPI Softer, But Overshadowed: Earlier in the week, softer-than-expected US CPI data had briefly boosted hopes for Fed rate cuts and pressured the dollar. 
• US-China Trade Progress: The week began with optimism as the US and China agreed on a framework to implement their Geneva trade accord, supporting risk appetite early on.
• Bitcoin Rally Pauses: Bitcoin declined to just above $104,000, dropping 2.1% in 24 hours, as its recent strong rally appeared to pause.
• Week Ahead Focus – Key Risk Events: The FOMC decision & Dot Plot (Wed), BoJ policy (Tue), and key European central bank meetings (SNB & BoE Thu) are the main events, alongside acute geopolitical monitoring.

Looking Ahead

Looking ahead, markets brace for a barrage of central bank decisions amidst heightened geopolitical and economic uncertainty. The Federal Reserve’s policy meeting concludes on Wednesday, and while no rate change is expected, the accompanying statement, Chair Powell’s press conference, and crucially, the updated economic projections including the new ‘dot plot’ will be intensely scrutinized. The Fed faces a complex backdrop of easing inflation (May CPI was softer), a still-solid labor market, but now significantly increased geopolitical risks and ongoing trade uncertainties. The dot plot’s indication of one versus two rate cuts for the year will be a key market focus. 

Index	Last Closing Level	Friday’s Change	Friday’s Change (%)
DJ Industrials	42197	-769.83	-0.0179
S&P 500	5976	-68.29	-0.0113
Nasdaq	19406	-255.66	-0.013
Russell 2000	2100	-39.59	-0.0185

Before the Fed, the Bank of Japan (BoJ) announces its policy on Tuesday. Given Governor Ueda’s recent cautious tone and the heightened global uncertainty, the BoJ is likely to keep rates on hold and may signal that further rate hikes could be pushed further into the future, potentially into 2026. On Thursday, both the Swiss National Bank (SNB) and the Bank of England (BoE) deliver their rate decisions. The SNB is widely expected to cut rates, with markets debating a 25bps versus a more aggressive 50bps cut that would take Swiss rates back into negative territory. Following a string of weak UK economic data, the BoE may adopt a more dovish stance, even if it keeps rates on hold for now. Other key data includes Japanese National CPI (Friday), New Zealand Q1 GDP (Wednesday), and Australia’s May employment report (Thursday).

Market Overview 

Global financial markets experienced a sharp reversal late in the week as severe geopolitical escalations in the Middle East rattled investor confidence. Reports of explosions over Israel, attributed to Iranian retaliatory missile strikes following alleged Israeli attacks on Iran’s Natanz nuclear facility and top military commanders, sent stocks tumbling and safe-haven assets soaring on Friday. This dramatic turn of events came after the International Atomic Energy Agency (IAEA) declared Iran in breach of its non-proliferation obligations. President Trump indicated that planned US-Iran nuclear talks were still on but uncertain, while Iran denied plans to speak. 

The week had started on a more optimistic note, with risk appetite supported by an agreement between the US and China on a framework to implement their recent trade accord reached in Geneva. Softer-than-expected US CPI data mid-week also briefly boosted sentiment and weighed on the dollar, as it fanned hopes for earlier Federal Reserve rate cuts. However, these factors were ultimately overwhelmed by the escalating Iran-Israel conflict. The dollar reversed its earlier losses to rally strongly on Friday, gold prices surged, and oil prices experienced a dramatic spike. Treasury yields, after initially falling on safe-haven buying, reversed course and rose as bonds were sold off.

Economic Data Calendar (Week of June 16th) 

TUE (Jun 18): 

• Bank of Japan (BoJ) Monetary Policy Decision & Press Conference: No rate change expected. Focus on forward guidance regarding future rate hikes, potentially pushed out due to trade/geopolitical uncertainty. Updated growth/inflation forecasts. 

WED (Jun 19): 

• FOMC Rate Decision, Statement, Economic Projections (incl. Dot Plot) & Press Conference: No rate change expected. Key focus on ‘dot plot’ (one vs. two cuts projected for 2025), Powell’s assessment of inflation, labor market, geopolitical risks, and tariff impacts. 
• New Zealand GDP (Q1): Growth data for New Zealand. 
• UK CPI (May): (Note: Last week’s data was for Apr; if May data is out, it will be key for BoE). 

THU (Jun 20): 

• Swiss National Bank (SNB) Monetary Policy Assessment & Press Conference: Rate cut fully priced in; debate is 25bps vs. 50bps (to negative rates). Decision could directly impact CHF. 
• Bank of England (BoE) Rate Decision, Minutes & Monetary Policy Summary: No rate change expected after recent 25bps cut. Focus on tone, any shift in dovishness given weak data. Next cut fully priced for September. 
• Australian Employment Report (May): Jobs data for Australia. 

FRI (Jun 21): 

• Japanese National CPI (May): Key inflation data for Japan. 

Commodities, Currencies, and Treasuries 

Geopolitical turmoil ignited commodity markets on Friday. August gold prices surged by $50.40 (1.48%) to settle at $3,452.80 an ounce, hitting highs near $3,468 earlier, as investors flocked to the safe-haven metal. Crude oil prices saw a massive rally, with WTI jumping $4.94 (7.26%) to $72.98/bbl and Brent soaring $4.87 (7.02%) to $74.23/bbl, on fears of supply disruptions from the Middle East conflict. Natural gas, however, fell over 5% for the week.

Asset	Last Level	Friday’s Change	Unit / % Change
WTI Crude	72.98	4.94	USD/bbl
Brent Crude	74.23	4.87	USD/bbl
Gold (Aug Fut.)	3452.8	50.4	USD/oz
EUR/USD	1.1541	-0.0042	Rate
USD/JPY	143.88	0.41	Rate
10-Year Note Yield	0.04409	0.00052	Yield (%)

The U.S. dollar gained broadly on safe-haven flows, reversing earlier weakness seen after softer CPI data. The Japanese Yen also benefited from haven demand. Treasury yields experienced significant volatility; after an initial dip (prices rose) on safe-haven buying, yields rallied sharply as bonds were sold off, with the 10-year yield hitting highs of 4.45% before settling around 4.41%.