Market volatility returned this week as tensions flared in the Middle East. Oil prices bounced higher from recent lows, pressuring stock and bond markets, as investors turned their attention back to the Strait of Hormuz and the global economic implications if the war with Iran resumes. The U.S. said it reimposed oil sanctions and carried out retaliatory air strikes on Tuesday after reports that commercial vessels took incoming fire from Iran. President Donald Trump told reporters on Wednesday morning that the ceasefire could be “over.”
U.S. stocks have largely powered ahead despite uncertainty over how the Iran conflict might be resolved. The benchmark S&P 500 has more than recovered from its year-to-date low in March during the height of the war, fueled by a sense of optimism over the AI infrastructure buildout, federal tax changes that were enacted in 2025, and resilient corporate earnings. Based on analyst estimates, earnings growth is forecast to hit 23.3% year-over-year for the second quarter, according to a FactSet report last Friday. If that holds true, it would be the second consecutive quarter that earnings rose more than 20%. Earnings season kicks into high gear next week with some of the largest U.S. banks set to report second-quarter financial results.
In addition to quarterly results, market participants will be parsing how companies react to the recent uptick in inflation and its impact on their own costs as well as consumer spending. Meanwhile, the Federal Reserve is set to make a rate decision at the end of July, potentially altering the path ahead for interest rates. James Bullard, former President and CEO of the Federal Reserve Bank of St. Louis, joined PGIM's Daleep Singh on The Outthinking Investor podcast to analyze the start of the Kevin Warsh era at the Fed. They discussed the prospect of a hawkish response to inflation, the case for lower rates over the long run, and potential market implications if the Fed changes how it conducts monetary policy.
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Fed’s Warsh Leaves Rate Options OpenAn interest rate move by the Fed would be up for debate in July as officials face mixed signals on jobs growth.詳しくはこちら
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Tech Volatility Returns as Rate Outlook ShiftsThe prospect of rising interest rates rippled across financial markets, as the potential spillover for technology companies and the broader economy came into focus.
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Fed Officials Split on Rate Hikes After Oil ShockThe Federal Reserve left interest rates untouched on Wednesday at its first policy meeting under new Chair Kevin Warsh, although some officials estimated an increase in the benchmark rate this year.詳しくはこちら
