Good morning investors! The market jumped yesterday as the situation in the Middle East appears to be cooling down.
Today we cover:
Oil comes falling
No rate cuts?
Earnings
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📊 Economy and News
Oil Prices Plunge as Iran-Israel Ceasefire Calms Global Markets
Oil prices tumbled sharply on Tuesday, falling to levels not seen since before the recent Iran-Israel conflict.
Brent crude dropped 6.1% to $67.14 per barrel, while West Texas Intermediate (WTI) fell 6% to $64.37 per barrel.
The sharp decline followed news of a tentative ceasefire between Iran and Israel, announced by President Donald Trump late Monday. Although Israel later accused Iran of violating the agreement—a claim Iran denied—the markets responded positively to the prospect of de-escalation. Analysts noted that the potential for renewed conflict still lingers, but for now, investor sentiment has improved.
The ceasefire significantly reduced fears of disruptions to global oil supplies, especially the closure of the Strait of Hormuz, a critical route for about 25% of the world’s oil. This alleviation of risk helped drive a rally in equities across major global markets.
Wall Street’s fear gauge, the CBOE Volatility Index, dropped 12%, indicating a more stable outlook among investors.
Asian and European markets also posted strong gains. Hong Kong’s Hang Seng rose 2%, mainland China’s Shanghai Composite climbed 1.2%, and Europe’s STOXX 600 index closed up 1.11%.
Global hits:
Canada’s annual inflation unchanged at 1.7% in May, core measures slightly ease.
China issues guidelines on financial support for boosting consumption.
British manufacturers report sharp contraction in orders.
Look at this: Goldman Sachs and Citadel back crypto firm Digital Asset in $135 million funding round.
Home prices are slowing: National home prices rose just 2.7% in April year-over-year—down from 3.4% in March and the slowest gain in nearly two years. Newer data from Parcl Labs suggests prices are now flat compared to last year.
Pandemic boomtowns are now lagging. Prices fell in Tampa (-2.2%) and Dallas (-0.2%), and barely moved in Phoenix and Miami. Meanwhile, formerly steady markets like New York (+7.9%), Chicago (+6%), and Detroit (+5.5%) are leading gains.
Mortgage rates remain above 7%, sidelining many buyers—especially first-timers, who now make up just 30% of home sales. Though listings are increasing, inventory remains well below pre-pandemic levels, limiting the potential for steep price drops.
Experts say prices are unlikely to crash due to ongoing supply shortages and owners clinging to low pandemic-era mortgage rates.
Not eager to cut rates? Fed officials Raphael Bostic and Michael Barr signaled no rush to cut rates, citing stable jobs and tariff-driven inflation risks. Bostic expects just one cut in late 2025.
Fed Chair Jerome Powell told Congress the Fed is “well positioned to wait,” despite pressure from Trump, though he left room for a potential earlier cut if needed.
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📈 Stocks
S&P 500 6,092.18 (+1.11%)
DJIA 43,089.02 (+1.19%)
NASDAQ 19,912.53 (+1.43%)
BRENT CRUDE 67.82 (+1.01%)
* Prices as of June 25th, 12:20 AM UTC
Some big earnings surprises
Carnival delivered a surprising beat this quarter, defying its earlier warnings about the potential impact of tariffs, geopolitical tensions, and weaker consumer demand. Instead of a slowdown, revenue rose 10% year-over-year, and the company announced it had hit its 2026 fiscal targets a full 18 months early.
Driven by record profitability and strong demand, Carnival reported a standout second quarter, with significantly improved net income compared to the previous year. The cruise line also raised its full-year guidance, citing continued booking strength and record reservations for 2026 — despite higher prices.
On the other hand, FedEx shares fell -5% after hours Tuesday after the company cut its full-year 2026 guidance and warned of weak global demand. It plans to reduce its Asia-to-America shipping capacity by 35% amid volatility.
Q4 earnings and revenue narrowly beat estimates, but the company forecast lower-than-expected Q1 profit of $3.40 to $4.00 per share, below the $4.03 analyst average. Citing trade uncertainty, FedEx declined to offer a full-year outlook.
Legal trouble: The UK’s Competition and Markets Authority is considering giving Google “strategic market status” under a new law targeting dominant tech firms. If approved, Google would face new rules, including offering choice screens and ensuring non-discriminatory search results.
Elsewhere, Tesla robotaxi incidents caught on camera in Austin draw regulators’ attention.
Check this: Amazon will invest £40 billion ($54 billion) in the U.K. over the next three years to build new warehouses and upgrade existing operations across the country.
Chip designer Ambarella has held talks with bankers and is considering a sale. Sources told the news outlet that the company could draw interest from semiconductor firms looking to beef up their automotive business. The California-based company is known for its system-on-chip semiconductors and software used for edge artificial intelligence.
Nektar Therapeutics jumped 156% after its eczema drug Rezpegaldesleukin showed strong results in a mid-stage trial, with some patients experiencing up to a 90% reduction in symptom severity.
Self driving everywhere: Uber surged over 7% after announcing a partnership with Alphabet’s Waymo to roll out self-driving cars in Atlanta. Waymo, known for its advanced autonomous tech, has logged over 1 million fully driverless miles and ran 150,000 weekly paid trips in San Francisco last year. The Atlanta launch includes dozens of Waymo vehicles offering rides across 65 square miles. Let’s not forget that we called Uber a buy in our PRO issue particularly highlights its growing partnerships. Upgrade today so you do not miss out on these calls!
Meanwhile, Lyft jumped 6.09% despite not being involved in the news. TD Cowen upgraded the stock to Buy from Hold and raised its price target to $21, calling Lyft its “Best Smidcap Idea for 2025.”
💵 Personal Finance
Senate’s $5 Trillion Debt Ceiling Hike: What It Means for Your Finances
The Senate’s proposed $5 trillion debt ceiling increase, part of Trump’s “One Big Beautiful Bill Act,” could have significant economic implications.
This record-breaking hike aims to fund government spending, including tax breaks set to expire in 2025, but it adds to a national debt that’s surged from $23 trillion in 2020 to over $36 trillion today.
Without this increase, the U.S. risks default by August, potentially disrupting Social Security, veterans’ benefits, and markets. While short-term borrowing costs may remain stable, experts like JPMorgan’s Jamie Dimon warn that rising deficits could eventually spike Treasury yields, raising rates on mortgages, credit cards, and loans.
Long-term, unchecked debt growth could strain the economy, impacting your wallet through higher borrowing costs or market instability.
Here’s an interesting video on the topic:
💰 Be a Better Investor
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👩🏽⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.