Global Shocks and Market Drops: June Delivers a Wake-Up Call

Daniel Ledenev
Jun 14
7 min read

Updated: Jul 5

👋 Welcome Back Investors! (June 9 to 13, 2025)

Summer may be heating up, but this week the markets ran cold. From a massive equity sell-off to rising oil prices and Fed pushback, the global financial system just got hit with a reality check. Whether you’ve been tracking every chart or just tuning back in, we’ve got your fast, no-fluff recap right here. A volatile mix of geopolitical tensions, tariff headlines, and bond yield spikes shook investor confidence, and reminded everyone that smooth rallies don’t last forever. Let’s unpack it all in this weeks market recap!

💲 Markets Hold Onto Rate Cut Hopes Despite Inflation Worries

U.S. markets began the week under pressure, but investor sentiment remained cautiously optimistic due to lingering hopes that the Federal Reserve will proceed with interest rate cuts later this year. Although recent inflation data showed only modest cooling, traders are still pricing in at least one rate cut by the end of 2025, reflecting a broader belief that the Fed will pivot to more accommodative policy as economic growth slows.

Key takeaways:

Sticky Inflation, but No Panic Yet: While inflation hasn’t declined as quickly as some hoped, the market is betting that a gradual slowdown in consumer spending and weaker labor market data will give the Fed room to ease monetary policy.
Fed Funds Futures Pricing: The CME Fed Watch Tool shows that traders expect a roughly 60 to 70% chance of a rate cut by September, with higher probabilities priced in for later in the year.
Market Volatility: The stock market has remained volatile as each piece of economic data causes shifts in rate expectations. Investors are watching closely for the upcoming CPI and PPI reports, which could shift the odds dramatically.

📈 CPI Cools Slightly — But Core Inflation Sticks

On June 12, the Bureau of Labor Statistics dropped its latest Consumer Price Index (CPI) data, giving investors a fresh look at inflation trends in May, and the results offered a mix of relief and caution.

The Numbers:

Headline CPI (all items):
- +0.2% in May, down from +0.3% in April
- +3.3% year-over-year, same as April
Core CPI (excluding food and energy):
- +0.3% in May
- +3.4% year-over-year, down from 3.6% in April

What’s Driving It:

Shelter remains the single biggest contributor to the monthly rise.
Gasoline prices dropped, easing some pressure.
Food at home stayed flat, while food away from home crept higher.
Used cars and trucks continued to fall in price, a welcome break from previous spikes.\

What It Means:

Investors looking for signs of cooling inflation got some good news, but not the all-clear. While headline inflation cooled slightly, core inflation, the Fed’s preferred gauge, is still running hot. That means the Fed might not feel confident pulling the trigger on a rate cut just yet. Markets initially responded positively, seeing this as a potential step toward policy easing later in the year, but it’s clear the “higher for longer” narrative still holds some weight.

🗺️U.S. & China Trade Talks Resume as Tensions Simmer

Trade officials from the U.S. and China resumed negotiations in Washington this week, marking the first formal multi-day discussions in months amid rising geopolitical friction and economic uncertainty. According to many sources, both sides labeled the talks as “constructive,” with discussions reportedly covering tariff rollbacks, intellectual property protections, and U.S. export controls on advanced technologies like semiconductors and AI systems. The timing is key, the talks come just as Trump doubled down on protectionist rhetoric, recently announcing a 50% tariff on imported steel and suggesting more to come if trade deficits persist. China, meanwhile, is under pressure to stabilize its economy and is seeking improved access to U.S. markets and relief from restrictions that have choked off its tech ambitions. While no deal was announced, the market viewed the meetings as a small but meaningful signal that both sides are willing to re-engage diplomatically. In a week filled with rate cut speculation, CPI data, and macro risk, this development added a bit of calm, though sentiment remains fragile, and another flare-up could quickly undo any goodwill. For now, the talks are less about breakthroughs and more about preventing further damage.

🛢️ Oil and Gold Surge as Middle East Tensions Explode

Markets were rocked late in the week after Israel launched targeted airstrikes on Iran, signaling a dangerous escalation in one of the world’s most volatile regions. According to multiple reports, the strikes hit military installations near Tehran and were framed by Israeli officials as retaliation for Iran’s increasing use of drones and ballistic missiles throughout the month. The geopolitical shockwave was immediate: Brent crude oil surged over 8%, briefly crossing $90 per barrel, while gold prices rallied to nearly $2,400 an ounce as traders rushed into defensive positions.

Energy stocks spiked across the board, with oil giants and defense contractors seeing sharp gains. Meanwhile, broader equity indices dipped, especially in risk-sensitive sectors like tech and consumer discretionary, as the threat of a prolonged conflict added a new layer of macro uncertainty. Analysts are now closely monitoring whether Iran will retaliate, and if so, how it might affect oil infrastructure or strategic shipping lanes in the Persian Gulf, any disruption could further strain already delicate supply chains.

Beyond the immediate market reaction, the timing couldn’t be more complicated. Inflation remains sticky, and the Fed, though signaling some openness to rate cuts later this year, is still wary of external shocks that could stoke prices. A sustained surge in oil prices could stall disinflation progress, sour consumer sentiment, and force the central bank to rethink its easing path.

Bottom line: This isn’t just a flash in the news cycle. If tensions spiral further, oil could become the biggest macro wildcard of the summer.

📉 Markets Slide as Geopolitical Risk Flares, Tech Stocks Retreat

Markets took a hit late in the week as rising geopolitical tensions and profit-taking in mega-cap tech sent the Dow, S&P 500, and Nasdaq lower. The sell off followed news of Israel’s military strike on Iran, which rattled global risk sentiment and sent oil prices spiking. Tech stocks, particularly Nvidia (NVDA) and Tesla (TSLA) were among the hardest hit, with both names pulling back sharply after strong multi-week rallies. Nvidia dropped as traders locked in gains from its recent post-earnings surge, while Tesla slipped on mixed delivery outlooks and rising raw material concerns. Defensive sectors like energy and utilities outperformed as investors rotated into safe-haven plays. Despite rate cut hopes staying alive after cooler CPI data, the sudden escalation in the Middle East reminded markets that geopolitical risk can override macro tailwinds in an instant. It was a textbook reversal day: hot sectors cooled off, volatility ticked up, and cash moved to the sidelines.

🏛️ Trump Slams Fed Chair Powell Over Rate Cuts

In yet another clash between politics and central banking, Donald Trump launched a sharp critique of Federal Reserve Chair Jerome Powell, questioning the Fed’s recent policy decisions and accusing Powell of failing to act aggressively enough on rate cuts. Trump claimed that the central bank’s cautious pace is hurting American competitiveness and putting pressure on consumer wallets, especially in a volatile global environment marked by trade disputes and inflation uncertainty. The criticism comes as markets remain uncertain about the Fed’s path forward. While a recent rate cut offered some relief, the Fed’s messaging has remained deliberately vague, leaving investors unsure of how many cuts, if any are still on the table for 2025. Trump’s remarks are fueling speculation over whether a second term could bring political interference in Fed policy, especially given his long-standing frustrations with Powell’s leadership.

The takeaway: Trump’s comments add political noise to an already uncertain rate environment, and markets hate uncertainty.

👀 Stocks to Watch: What This Week’s Moves Reveal

The second week of June brought a full dose of volatility. With rate cut hopes slipping, oil prices spiking, and geopolitical risk taking over the narrative, investors rotated sharply into defensives while trimming risk in high-flying tech. From energy breakouts to macro-sensitive pullbacks, here are the names that made headlines this week:

Nvidia (NVDA) – After weeks of strength, Nvidia cooled off as investors booked profits following its post-earnings rally. Shares slipped alongside the broader tech sector, but bullish sentiment remains intact as AI demand continues to dominate long-term positioning.
Tesla (TSLA) – Lost ground this week amid a risk-off tone and rising raw material concerns. The stock fell in line with growth peers as geopolitical tension and inflation fears weighed on rate-sensitive names.
Nucor (NUE) – Continued its post-tariff rally, gaining further traction as Trump’s steel policy remained in focus. Investors bet on stronger domestic demand and less foreign competition, keeping momentum alive.
SPDR Energy ETF (XLE) – Surged with oil prices as Middle East tensions spiked. Rising crude gave a boost to major energy players like ExxonMobil and Chevron, pushing the entire sector into leadership territory.
Gold Miners (GDX, NEM) – Gained as gold hit fresh highs on safe-haven demand. With bond yields rising and the dollar under pressure, gold equities saw renewed attention as a hedge against uncertainty.

🛎️That’s a Wrap!

That’s it for this week’s market recap, appreciate you tuning in! From escalating tensions in the Middle East and a spike in oil and gold prices to Trump’s latest jabs at the Fed and slipping rate cut hopes, this week delivered a full spectrum of macro chaos. Tech took a breather, energy and defensives stepped up, and investors were reminded that headlines move markets fast. We’ll be back next week with another clear-cut breakdown of what moved, what mattered, and what’s coming as June rolls on.

Until then, stay focused and stay curious. Catch you next week 👋