Francross, a senior market strategist at Angel Oak Capital Advisor, talked about how the recent geopolitical tensions—specifically, the Israeli attacks on Iranian nuclear facilities—are affecting market dynamics.
Following the assaults, there was a noticeable shift among investors, many of whom sought refuge in safer investments like gold and US stocks. Overall, the three major US indices saw declines on Friday, with the Dow Jones industrial average losing over 500 points, roughly a 1% drop, while the Nasdaq Composite and S&P 500 fell around 0.6% during the afternoon trading session.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| DJI | Dow Jones average | 42309.26 | -658.36 | -1.53% |
| SP500 | S&P 500 | 5999.32 | -45.94 | -0.76% |
| COMP | Nasdaq Composite Index | 19512.04 | -150.44 | -0.77% |
The military action, which started late Thursday, initially drove oil prices up from the mid-$70 per barrel range by 11% before those gains were cut in half. Companies like ExxonMobil, Chevron, and ConocoPhillips saw gains, and the US Petroleum Fund ETF achieved its highest profits since April.
Oil and Energy
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| XOM | Exxon Mobil Corp. | 112.14 | +2.40 | +2.19% |
| CVX | Chevron Corp. | 145.90 | +0.93 | +0.64% |
| COP | ConocoPhillips | 96.29 | +1.60 | +1.69% |
Investor Louis Navellier noted that ongoing tensions could impact inflation statistics adversely if tensions do not resolve soon. Reports indicate consumer inflation remains above the Fed’s 2% target but shows signs of easing.
Bond Yields Rising
While bond yields had been declining, they saw an uptick recently, surpassing 4.4%, reigniting inflation fears. Frank Ross remarked that there’s been a classic flight to safety among investors, with many focusing on Treasury yields amid these tensions.
Gold Hits New Records
Gold prices soared to $3,500 per ounce, marking a rally for the third consecutive session. The SPDR Gold Trust Exchange Traded Fund, the largest backed by physical gold, is on track for a weekly increase of 3%.
Fed Watch
The Federal Reserve is not anticipated to adjust interest rates in the upcoming meeting or in July. The CME FedWatch Tool suggests that interest rate cuts could become a reality in September.
Trump’s Remarks on the Fed
President Trump has publicly criticized Federal Reserve Chairman Jerome Powell, branding him with nicknames like “Nucskar” and “Mr. Too Late,” pointing out the Fed’s reluctance to lower interest rates compared to movements by foreign counterparts, including the European Central Bank.
Cryptocurrency
Bitcoin continues to hover around the $105,000 mark, staying below its all-time high of $111,986.44.
