Market Musings 6/23/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
Why is the market higher after the US struck Iran?
Markets rally Monday despite the US escalating Middle East tensions with its own strike on Iran. So, why is the market rising?
It’s all about oil. It’s no secret the Middle East is a significant producer of oil with about a fourth of the world’s production. Any geopolitical conflict in the region could greatly disrupt the global oil supply; and therefore impact pricing.
Heading into the weekend, oil was up 23% since the start of the month as tensions brewed.
Over the weekend, the US entered the conflict by bombing three Iranian nuclear sites. Followed by Iran pledging to forcefully respond back－threatening “everlasting consequences”.
Markets seemed primarily worried Iran could disrupt global shipping through the Strait of Hormuz. Sunday night, futures and global markets fell with the US markets opening lower as well. Meanwhile, crude oil pricing continued to climb.
Then, Iran “retaliated” midday. Iran sent missiles at a US base in Qatar, but with advanced notice given. It was just a symbolic retaliation and looking to deescalate.
Markets sharply reversed midday ending Monday higher. Similarly, oil reversed and ended significantly lower.
So now what?
The White House announced a ceasefire between Israel and Iran. It’ll be a very positive development for tensions in the region as well as stabilizing oil pricing.
Markets are higher in afterhours on the development and we’d expect that to translate to a higher open on Tuesday as well.
We’ll also get June Consumer Confidence data Tuesday. Markets will be looking for the #ConsumerConfidence rebound to continue off the #Tariffs panic in April. However, with the ceasefire, the #ConsumerConfidence may be overshadowed unless a significantly surprising confidence reading in either direction.
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The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by Pixabay.