Weekly Market Commentary - JUNE 23, 2025

Week In Review

Investor apprehension regarding geopolitical risk, trade policy uncertainty and stagflationary prospects continued to weigh on market sentiment in a holiday-shortened week, suppressing U.S. equity market momentum. Antagonism in the Middle East escalated over the weekend as the U.S. initiated a stunning bomb strike of Iranian nuclear facilities on Saturday. U.S. military intervention compounds fears of a broader war and eventual oil supply disruptions, driving price increases in energy markets that could lead to higher production costs and burgeoning consumer inflation. One day earlier, the U.S. Supreme Court spurned the request by a private firm to expedite a review of the legality of recently imposed U.S. tariffs. Consequently, the U.S. trade agenda and the potential for it to instigate slower economic growth remains a key investor concern. The Federal Reserve concluded as much in their Summary of Economic Projections. The Fed policy meeting ended with the central interest rate unchanged. However, the Fed used the “dot plot” to lower their 2025 GDP forecast and increase the outlook for both the inflation and unemployment rates. Fed Chair Jerome Powell reiterated that rate cuts will be data dependent. In a muted return to post-holiday trading, the S&P 500 edged lower -0.2%.

This Week

The economic highlight will be the Personal Consumption Expenditures Price Index update, the Federal Reserve’s preferred inflation measure. Fed Chair Jerome Powell will provide his monetary policy outlook to the House Financial Services Committee. The financial markets will remain focused on the Middle East crisis and the potential economic implications.

Portfolio Theme

Indices that track economic and trade policy uncertainty were created in the last decade. The authors found that policy uncertainty raises stock price volatility and signals lower future economic growth. Simplicity offers diversified model portfolios that may soften the impact of market volatility.

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Data:

Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes chart idea sourced from State Street Global Advisors. 1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums.

2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX). Past performance does not guarantee future results. Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication.