When Trade Talks Met Missile Strikes: A Week of Everything

☕ The Week That Was

What a wild ride it’s been, folks—this week had more plot twists than a season finale of House of the Dragon. We started Monday with the U.S. and China playing nice in London, discussing trade like civilized adults. By Tuesday, Los Angeles was looking like a battle zone with immigration protests turning the city upside down.

Wednesday brought us inflation data that actually made sense (shocking!), plus Greta Thunberg getting detained by Israeli forces while trying to deliver aid to Gaza. Then Thursday had markets cautiously optimistic about the trade talks.

But Friday? Oh Friday the 13th… Israel decided to send Iran some very unfriendly messages via missile, and suddenly everyone remembered why they keep gold in their portfolios. Energy stocks partied like it’s 2008 while tech stocks wondered what they did wrong. The VIX went from sleepy at 16.77 to fully caffeinated at over 20, reminding everyone that 2025 still has surprises left.

🔥 Top News Story of the Week

While this week started with diplomatic hope and domestic tensions, it ended with the kind of geopolitical fireworks that make portfolio managers reach for antacids.

Israel launched coordinated airstrikes against Iran, targeting military installations and nuclear facilities in what defense officials called their most significant offensive in decades. The attacks reportedly killed three senior Iranian military officials and damaged the Natanz uranium enrichment facility.

Iran retaliated with over 100 drones aimed at Israeli territory, escalating a long-simmering conflict. Markets reacted like a fire drill: oil surged 12%, VIX jumped 15%, and defense stocks like Lockheed and RTX climbed over 3%, while airline stocks nosedived.

This wasn’t just another flashpoint—it was a full-scale market mood swing.

📊 Weekly Scoreboard

🖼️ Sector Heat Map

🏆 Winner & Loser of the Week

📰 Top 10 Storylines

1. US-China Trade Framework Deal - After marathon talks in London, the U.S. and China announced a tentative trade agreement, aiming to ease tensions and revive stalled negotiations. While the deal includes tariff reductions and increased cooperation on rare earth exports, markets responded cautiously, reflecting skepticism about the deal’s durability and the lack of concrete details.

2. Los Angeles Immigration Riots - ICE raids in Los Angeles sparked widespread protests, leading to clashes with law enforcement and the deployment of the National Guard. The unrest disrupted local businesses and transportation, raising concerns about potential economic impacts and investor sentiment in the region.

3. Greta Thunberg Gaza Detention - Climate activist Greta Thunberg was detained by Israeli forces while attempting to deliver aid to Gaza, drawing international attention. The incident heightened geopolitical tensions and underscored the complexities of humanitarian efforts in conflict zones, though its direct market impact was limited.

4. CPI Inflation Stays Tame - May’s Consumer Price Index (CPI) rose by 0.1%, keeping the annual rate at 2.4%, below expectations. The subdued inflation data provided some relief to markets, suggesting that the Federal Reserve might maintain its current interest rate policy in the near term.

5. Israel Strikes Iran - Israel launched significant airstrikes on Iranian military and nuclear facilities, escalating regional tensions. The conflict led to a surge in oil prices and increased market volatility, with investors seeking safe-haven assets amid fears of broader geopolitical instability.

6. Fed Meeting Looms Large - The upcoming Federal Open Market Committee (FOMC) meeting is anticipated to maintain current interest rates, with markets closely watching for any signals regarding future monetary policy amid evolving economic indicators.

7. Oracle Soars on AI Optimism - Oracle’s stock surged over 7% following optimistic projections for its AI-driven cloud services. The company’s strong performance highlighted investor enthusiasm for AI technologies, even as broader tech markets faced headwinds.

8. Energy Stocks Break Out - The energy sector experienced significant gains, with the Energy Select Sector SPDR Fund (XLE) rising over 8% amid surging oil prices. Investors flocked to energy stocks as geopolitical tensions underscored the sector’s strategic importance.

9. Airlines Hit Turbulence - Rising fuel costs, driven by escalating oil prices, negatively impacted airline stocks. Companies like Delta and United faced declines as investors anticipated increased operational expenses and potential reductions in profit margins.

10. Small Business Optimism Rises - Despite broader economic uncertainties, small business optimism saw a notable increase, suggesting resilience in the sector. This confidence could signal continued consumer spending and support for economic growth, providing a counterbalance to market volatility.

🪙 Gold & Hard-Asset Recap

Gold closed at $3,385, flexing its safe-haven status. Oil stole the show though—WTI spiked to $77 before settling at $73.18. Brent hit $74.50.

Energy stocks loved the chaos. XLE posted its best week in months, riding the geopolitical risk wave. With demand still strong and risks rising, commodities may have more room to run.

🏡 Real-Estate Roundup

Mortgage rates held steady around 6.75%. REITs dropped 1.2% as volatility spooked income-seekers. Fed’s next move—and oil—could shake things up.

🌤️ Next Week’s Teasers

• FOMC Meeting – June 17–18

• Earnings – Lennar (Mon), Accenture (Fri), energy names on deck

• Economic Data – Retail sales (Tues), housing starts (Wed)

• Wildcard – Iran’s next move

🍷 Wine & Dine Pairings

• Monday’s diplomacy? Chill Chablis

• Powell’s Speech? Whatever’s 100 proof

✂️ Wrapping It Up

This week served as a stark reminder of the market’s sensitivity to geopolitical events and economic indicators. The tentative U.S.-China trade agreement offered a glimmer of hope for improved international relations, yet skepticism remains due to unresolved structural issues. Domestically, the unrest in Los Angeles highlighted the potential for social issues to impact economic stability.

On the global stage, Israel’s military actions against Iran introduced significant volatility, propelling oil prices upward and prompting investors to reassess risk exposures. Meanwhile, the Federal Reserve’s upcoming meeting is poised to be a pivotal moment, with markets eager for clarity on future monetary policy directions.

In the corporate realm, Oracle’s strong performance amidst the AI boom provided a silver lining, demonstrating that innovation continues to drive investor interest. Conversely, the energy sector’s resurgence underscores the market’s responsiveness to geopolitical developments.

As we navigate these turbulent times, diversification and vigilance remain key. Investors should stay informed and ready to pivot faster than a caffeinated day trader on CPI report morning.

Until next week—may your portfolios be resilient, your insights sharp, and your coffee strong enough to survive another Fed meeting.

⚠️ Disclaimer

This newsletter is for entertainment purposes only—like a Netflix docudrama about market mayhem. It’s not investment advice. If you panic-bought gold the moment missiles started flying, don’t worry—you and half of Wall Street just reenacted a real-time episode of Succession. Just remember: even Oracle can’t predict the Fed’s next plot twist