Weekly Market Performance — June 13, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of June 9, 2025. Major U.S. averages ended mixed after reversing modest week-to-date gains Friday in response to the significant escalation in the Israel-Iran military conflict to close the week. European equities fell over the last five days amid geopolitical and trade concerns, although the U.K. managed to eke out a small gain, while major Asian markets ended mixed. U.S. Treasuries gained ground as bond market investors digested a strong batch of Treasury auctions, while in commodities, crude oil prices rallied on the back of Iran’s response to Israeli airstrikes.

Index Performance

U.S. and International Equities

U.S. Equities: The S&P 500 churned over the latter half of the week, closing little changed from where the equity benchmark began the week. The Nasdaq followed suit in ending little changed while the Dow lagged. Market watchers remained glued to their screens early this week, with U.S.-China trade talks extending from Monday to Tuesday in London as leaders from the world’s two largest economies ironed out tariff details. However, the announcement that Washington and Beijing had agreed on a trade framework failed to inspire a market rally with investors interpreting the deal as implementation of the Geneva truce reached weeks ago instead of a trade breakthrough. Following the announcement, risk appetite remained weak after the White House stated trade partners will soon be notified of tariff rates to be enforced following the expiration of the tariff delay on July 9. The Trump administration also hinted at higher auto tariff rates and that trade talks with Japan, India, and European Union (EU) remain challenging.

Back-to-back softening inflation reports attempted to buoy markets, suggesting U.S. tariffs have not yet created higher prices for businesses and consumers, also supporting rate cut bets in tandem with more upward pressure on jobless claims. However, investors grappled with the overhang of intensifying geopolitical tensions in the Middle East. Stocks pared week-to-date gains to end the week in response to Israeli airstrikes on Iranian nuclear facilities and military leadership.

International Equities: European stocks ended lower over the last five days. In addition to significant geopolitical tensions, trade headlines weighed on sentiment after U.S. Commerce Secretary Howard Lutnick stated the EU is likely to be one of the last trade deals to be completed. Central bank news flow also remained in play, with the European Central Bank (ECB) policy outlook continuing to be debated between central bank officials. The U.K. bucked the trend to close with slight gains as markets analyzed finance minister Rachel Reeves' new focus on defense spending in the U.K.’s three-year budget plan. France ended with somewhat measured losses despite French central bankers slashing growth and inflation forecasts due to U.S. tariff impacts, while Germany led declines.

Major Asian equity markets closed the week mixed with multiple markets erasing modest weekly gains in Friday’s session. Risk assets for the region sold off on the risk of wider conflict in the Middle East, however Taiwan and South Korea held on with solid weekly gains. Lingering election enthusiasm in South Korea carried over to the fresh week, also receiving upside boosts from reports that the country’s leaders are close to a trade deal with the White House. Plus, Bank of Korea (BOK) Governor Rhee called for urgent stimulus to prop up the economy, reiterating that reform is necessary for a lasting improvement. Taiwan gained on the back of tech shares, while Japan’s major averages ended mixed on deteriorating manufacturer sentiment and remarks from Bank of Japan (BOJ) Governor Ueda reiterating a readiness to tighten policy. Hong Kong advanced and mainland China ended modestly lower.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded higher this week. The monetary policy rate-sensitive two-year yield and the 10-year yield both ended roughly seven basis points (0.07%) lower than when the week started. This week’s Treasury auctions were met with sufficient demand to, at least for this week, put to rest broader concerns about Treasury issuance. The Treasury Department auctioned off $119 billion (total) of 3-year, 10-year and 30-year Treasury securities, and each auction generally came in better than expected. Moreover, yesterday’s 30-year auction, which has been a tenor that has been shunned globally, was met with solid demand and came to market at a lower-than-anticipated interest rate. Further, demand was robust from both foreign and domestic investors. No doubt, concerns about Treasury issuance will remain front and center as issuance is expected to continue to grow to fill existing (and expected) fiscal deficits. But, this week showed, rather conclusively, that there is no buyer fatigue for Treasury securities yet.

Commodities and Currencies: The broader commodities complex overcame rangebound trading through the majority of the week to seal a solid weekly advance thanks to Friday’s gain. A spike in West Texas Intermediate (WTI) crude to end the week lifted the Bloomberg Commodities Index in response to Israeli airstrikes overnight on Thursday. Oil prices were supported by a drop in inventories this week, and upward pressure on prices could continue following the airstrikes on concerns around passage through the Straits of Hormuz out of the Persian Gulf region, which supplies roughly a third of the world’s oil demand, and potential retaliatory measures. Gold also advanced to end the week following the ramp in geopolitical conflict, catching a fresh bid as a haven asset after receiving support Thursday from bolstered Federal Reserve (Fed) rate cut bets. The U.S. dollar slightly pared weekly losses Friday, but the greenback ultimately ended the week lower amid ongoing market concerns around U.S. trade policy.

Economic Weekly Roundup

CPI Better Than Expected. Consumer inflation arrived below expectations for the fourth consecutive month. Consumer prices in May rose 0.1% month over month, after rising 0.2% in April. Annual inflation according to this metric is 2.4% and core inflation is 2.8%, higher than the Fed’s 2% target. Surprisingly, new and used vehicle prices declined in May, despite many expecting an increase in prices from tariffs. Core services ex-housing was unchanged in May, keeping the annual rate of inflation hovering around 3%. Prices for apparel and autos, both highly sensitive to trade conditions, declined in May. Apparel prices also declined in April, indicating that these companies likely absorbed tariff costs. But don’t expect that to continue. Yields plummeted on the better-than-expected news. In a separate report Thursday, producer prices also arrived softer than expected for May, rising 0.1% from April compared to forecasts for a 0.2% increase. Although data matched consensus estimates of a 2.6% increase on an annual basis.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Empire Manufacturing (Jun)

• Tuesday: Retail Sales (May), Import Price Index (May), Export Price Index (May), New York Fed Services Business Activity (Jun), Industrial Production (May), Capacity Utilization (May), Manufacturing (SIC) Production (May), Business Inventories (Apr), NAHB Housing Market Index (Jun)

• Wednesday: MBA Mortgage Applications (Jun 13), Housing Starts (May), Building Permits (May preliminary), Initial Jobless Claims (Jun 14), Continuing Claims (Jun 7), FOMC Rate Decision and Median Rate Forecasts (Jun 18), Net Long-term TIC Flows (Apr), Total Net TIC Flows (Apr)

• Thursday: Juneteenth holiday, no economic releases scheduled

• Friday: Philadelphia Fed Business Outlook (Jun), Leading Index (May)

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