Weekly Market Update (June 22, 2025)

Market Hedwig
12 minutes ago
2 min read

HIGHLIGHTS

Fed remained in a holding pattern this week. Geopolitical tensions are still high. Central banks remain cautious while the internal views are diverging due to the weak data on growth.

Middle East: Israel-Iran conflict is likely to dominate headlines. The situation is fluid as western countries are trying to draw Iran back to negotiation table. Oil remains the key to focus, and investors will monitor closely for any damage to energy infrastructure and disruption to oil exports.

FOMC: Fed has raised the inflation forecast and lowered the GDP growth forecast to reflect the higher tariff impact than it is previously expected. Rate cut expectation is in line with expectation of two cuts to 3.875% this year.

US-China: While negotiations between US and China have progressed, issues including semiconductors, rare earths and student visas remain challenging to resolve fully. In the near term, Chinese exports will be stable and would decrease the need for more aggressive policy easing.

MARKETS

Nasdaq	19,447.41	+0.21%
S&P 500	5,967.84	-0.15%
Dow	42,206.82	+0.02%
10-Year	4.38%	-4bps
Brent	77.27	+3.63%
DXY	98.77	+0.64%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

Morgan Stanley: As the financial condition improved, the volatility fell in the previous weeks. The stabilizing interest rates, solid flows and dropping oil prices helped with market liquidity, which amplified the strength of rally.

UBS: Historical record shows that the impact of geopolitical events on equity markets has tended to be short-lived. We recommend phasing into global equities amid near-term volatility.

Fixed Income

Standard Chartered: USD is expected to weaken further, favorable to JPY, GBP and EUR. We recommend 5-7Y maturities in USD bonds and Emerging Market local currency bonds.

Morgan Stanley: Although there are some inflation headwinds and slowing growth, the monetary easing and steadier fiscal policies have helped to keep Emerging Markets bond returns compounding. The recent volatile US dollar has dropped significantly, further favoring the local currency debt.

Economy

Goldman Sachs: We expect one cut in 2025 followed by two more cuts in 2026. Peak tariff effects on inflation will reflect over the summer. Fed is expected to stay tuned before it resumes rate cuts.

Barclays: We believe there will be more monetary easing from all major central banks in emerging Asia, but with a cautious and conservative pace. They are likely to wait and see.

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.