Weekly market recap & what's ahead

23 June 2025 (recap week of 16 to 20 June 2025)

---

Headlines & introduction

Markets faced a volatile week as the US Federal Reserve held rates steady and geopolitical tensions surged after the US launched strikes on Iranian nuclear sites. Equities and digital assets were pressured by risk-off sentiment, while volatility spiked on options expiry and war headlines. Central bank policy, macro data, and sector rotation drove sharp moves across asset classes.
Markets were shaken by war risks and mixed policy signals.

---

Equities

Markets swung on Fed policy and US-Iran tensions. Early-week gains faded as Trump’s threats and weak US retail sales weighed on sentiment. The S&P 500 lost 0.8% Tuesday, while tech and energy diverged—AMD soared 9% on an analyst upgrade; Exxon and Chevron led on oil gains. Europe fell midweek (DAX -1.1% Tuesday) but rebounded Friday as hopes for diplomacy returned. UK’s FTSE 100 slid 0.9% for the week. Asia was mixed, with the Nikkei down 0.5% Friday, as risk appetite remained weak on war headlines and policy uncertainty. Defensive and energy stocks outperformed by week’s end.
Tensions and data swings drove investors toward safer sectors.

---

Volatility

The VIX moved sharply, peaking above 21.6 on Tuesday as war risks and Fed anxiety surged. Volatility remained elevated into Friday's triple witching expiry (VIX > 20), before easing below recent highs (20.62 at Friday’s close). Short-term swings and options activity were pronounced but are expected to fade as expiry effects roll off.
Volatility stayed high but could ease as expiry noise fades.

---

Digital assets

Bitcoin held above $104,500 midweek but dropped below $101,000 into the weekend as war risks and Fed uncertainty hit sentiment. Ether followed, sliding to $2,250 by Friday. IBIT and ETHA spot ETFs saw outflows late in the week, though quarter-to-date inflows signal ongoing institutional adoption. Crypto stocks were mixed, with Coinbase surging on regulatory optimism, while MicroStrategy slipped. Markets remain highly sensitive to macro headlines.
Crypto tracked macro jitters, despite steady institutional demand.

---

Fixed income

US Treasury yields were rangebound, with the 10-year near 4.39% and 2-year at 3.92% by Friday, little changed despite bombings in Iran. The Fed projected just two cuts in 2025, keeping yields anchored.
Japanese government bonds shrugged off hot May CPI, with the 10-year yield edging down to ~1.40%. SNB and Norges Bank cut rates; BoE held steady. High yield US credit spreads tightened slightly even as risk sentiment soured.
Yields stayed steady as central banks signalled caution.

---

Commodities

Crude oil spiked after the US struck Iranian nuclear sites, with Brent touching a five-month high near $80 before easing as fears of immediate escalation faded. A ten-dollar risk premium is now priced in but could unwind rapidly.
Gold rallied towards $3,400 on safe-haven flows, but profit-taking set in post-FOMC. Silver and platinum also retreated after multi-year highs.
Copper saw a dramatic squeeze in London on low inventories and tariff-driven shipping, with cash-to-3’s spread hitting the highest since 2021.
Oil, metals and gold swung wildly on war and supply fears.

---

Currencies

The US dollar strengthened broadly on risk aversion, with EURUSD rebounding above 1.1500 and USDJPY above 147 after the US strikes. JPY weakened sharply on Japan’s new bond issuance plans.
The Swiss franc reversed losses after the SNB cut rates but hinted at more to come. AUD and NZD were the weakest G10 currencies, falling on global growth fears.
The dollar gained ground as investors sought safety.

---

Key takeaways

• Geopolitics: US strikes on Iran, risk-off sentiment dominates.
• Volatility: VIX peaked above 22, options expiry drove swings.
• Equities: Tech, banks led early; energy, defensives outperformed late week.
• Digital assets: BTC below $101k, ETF outflows, institutional bid persists.
• Fixed income: Yields steady; central banks cautious.
• Commodities: Oil, gold, copper volatile on war, macro and policy.
• Currencies: USD, JPY strong on risk; SNB, Norges cut rates.

---

Looking ahead (23 to 27 June 2025)

• US-Iran Tensions: Market reaction to Iran’s potential retaliation remains key.
• Fed Policy: Powell’s congressional testimony and May PCE inflation in focus.
• Earnings: Nike (Thursday), FedEx (Tuesday), Micron (Wednesday).
• Macro Data: Existing/new home sales, consumer confidence, GDP updates.
• Tesla robotaxi launch: Expected headlines, potential for TSLA volatility.
• Options Activity: Triple witching expiry aftermath; monitor VIX and hedging trends.

---

Conclusion

This past week’s market action was dominated by geopolitics, central bank caution, and a surge in volatility tied to war risks and options expiry. While sentiment improved on brief diplomatic signals, risks remain high for all asset classes. Investors should stay alert to further developments in the Middle East and shifting Fed signals.