MARKET COMMENTARY
Markets are off to a strong start in this shortened trading week, boosted by reports that Iran is signaling openness to peace talks with both Israel and the U.S. Major indexes climbed nearly 1% on the day, while crude oil gave back about 2% of its Friday spike. The weekend brought renewed tension as Israel and Iran traded strikes on each other’s energy facilities, raising fears of broader conflict. For now, signs of potential de-escalation have allowed investors to breathe a bit easier.
President Trump is in Canada this week for the G-7 Summit, where leaders from countries including Japan, Canada, and Mexico are aiming to make progress on trade negotiations ahead of the July 9 deadline. That marks the end of the current 90-day tariff pause, though many economists expect the deadline could be extended if no agreement is reached.
The spotlight this week turns to the Federal Reserve’s interest rate decision on Wednesday. According to CME’s FedWatch tool, markets are pricing in a 99.8% chance the Fed holds rates steady. This aligns with recent Fed commentary emphasizing a data-dependent approach—they’re waiting for clearer signs that inflation is sustainably trending toward their 2% target before considering any cuts, despite mounting political pressure from President Trump.
On the data front, May retail sales will be released Tuesday. While a slowdown is expected compared to prior months, the report is unlikely to materially impact the Fed’s decision. However, it will offer valuable insight into how consumer spending is responding to ongoing tariff uncertainty.
From a technical standpoint, the S&P 500 continues to exhibit bullish momentum, recently breaking above all major moving averages and nearing the 6,030 level. Key resistance remains at 6,060, which could be tested this week depending on how economic and geopolitical events unfold. Investor sentiment is tilting toward “greed,” but we’ll need another wave of positive data to push markets firmly into overbought territory.
Economic Releases This Week
Monday: Empire State Manufacturing Survey
Tuesday: US Retail Sales, Import Price Index, Industrial Production, Capacity Utilization, Business Inventories, Home Builder Confidence Index
Wednesday: Housing Starts, Building Permits, Initial Jobless Claims, FOMC Interest Rate Decision, Fed Chair Powell Press Conferencer Price Index, Core CPI, Monthly US Federal Budget
Thursday: None Scheduled, Juneteenth Holiday
Friday: Philadelphia Fed Manufacturing Survey, US Leading Economic Indicators
Stories to Start the Week
Leaders at G-7 Summit Talk Trade With Trump
Israel Strikes Iran State Media Buildings in Tehran
China’s Retail Sales Soared in May, Though Industrial Output Slowed
Meta is Bringing Ads to Whatsapp
OpenAI and Microsoft Tensions Are Reaching a Boiling Point