US Market Insights (June 23–27): All Eyes on Middle East Tensions

Tiger_James Ooi
06-23

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Things to Know Before Starting Your Week

1) Rising Middle East Risks – But Minimal Impact on U.S. Equities (So Far)

·       Geopolitical tensions are escalating as the U.S. warns Iran that any retaliation will be met with "force far greater," while Iran vows to retaliate. Despite this, S&P 500 futures was up 0.02% at the time of writing, suggesting limited market concern.

·       A contrarian view is gaining traction: if Iran’s nuclear capabilities have been significantly degraded, this may actually reduce long-term risks to Middle East stability—a potential net positive for markets.

·       Iran’s Oil Influence Is Limited

o   Over 90% of Iran’s oil exports go to China

o   Yet Iran accounts for only ~10% of China’s total oil imports.

o   The U.S. imports no Iranian oil, due to long-standing sanctions.

o   Therefore, Iran is not systemically critical to global oil supply—even if its exports are disrupted.

o   Recent oil price spikes are seen by market participants as transitory, not structural, inflation drivers.

2) $S&P 500(.SPX)$ Finds Immediate Support at 5956

o   The S&P 500 has pulled back 1.5% from its recent high of 6059 to 5968.
Traders should watch the 85.4% Elliott Wave retracement level at 5956 closely to see if support holds.

o   On the hourly chart, the index appears to be dipping toward a potential Head & Shoulders target at 5868, which may signal an interim bottom.

o   Notably, the Head & Shoulders target at 5868 also overlaps with the 78.6% Fibonacci retracement level at 5867, reinforcing the 5867–5868 zone as a key support if the 5956 level is broken.

o   From a broader technical perspective, the S&P 500 still looks likely to retest or break above its all-time high before any major correction. Historically, bear market rallies rarely reach such levels without forming a new high. The next key resistance level to watch is 6300.

Data as of June 20th

3) Fed Holds Interest Rates Steady

·       The Fed left interest rates unchanged, with the majority of voting members still projecting at least two more quarter-point cuts later this year. The equity market remained largely muted in response to the Fed’s inflation commentary.

·       According to the CME FedWatch Tool, the next 25 basis point rate cut is currently projected for the September FOMC meeting.

·       Market reaction was subdued: Equities remained relatively stable, with modest moves in Treasury yields and mixed sector response

Conclusion

·       The bullish case is supported by the belief that institutional investors remain underexposed to the current rally. If they begin to deploy more capital, it could further propel the stock market higher. This may also explain why the recent Middle East tensions have had limited impact on U.S. equities—institutional inflows could be providing underlying support.

·       Equity markets are currently ignoring credit market risks, such as rising bond yields, as investors focus on longer-term tailwinds including potential deregulation, tax cuts, and a possible "big, beautiful bill" (i.e. fiscal stimulus or industrial policy expansion).

·       Long-term investors may consider broad-market ETFs like $SPDR S&P 500 ETF Trust(SPY)$ , $iShares Core S&P 500 ETF(IVV)$ , and $Vanguard S&P 500 ETF(VOO)$ (which track the S&P 500), $Invesco QQQ(QQQ)$ (tracking the Nasdaq-100), and $Roundhill Magnificent Seven ETF(MAGS)$ (tracking the Magnificent 7) to capture potential upside from a continued market recovery.

·       AI-related stocks outside the Magnificent 7, such as $ARM Holdings(ARM)$, $Palantir Technologies Inc.(PLTR)$ , $NVIDIA(NVDA)$, $Oracle(ORCL)$ , $Broadcom(AVGO)$ , and TSMC, continue to show strength amid renewed interest in risk assets.

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# US Airstrikes = Stock Market Victory? Invest US or Israel Stocks?

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  • Tiger_James Ooi
    ·06-23
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    Conclusion

    ·       The bullish case is supported by the belief that institutional investors remain underexposed to the current rally. If they begin to deploy more capital, it could further propel the stock market higher. This may also explain why the recent Middle East tensions have had limited impact on U.S. equities—institutional inflows could be providing underlying support.
    ·       Equity markets are currently ignoring credit market risks, such as rising bond yields, as investors focus on longer-term tailwinds including potential deregulation, tax cuts, and a possible "big, beautiful bill" (i.e. fiscal stimulus or industrial policy expansion).
    ·       Long-term investors may consider broad-market ETFs like $SPDR S&P 500 ETF Trust(SPY)$ , $iShares Core S&P 500 ETF(IVV)$ , and $Vanguard S&P 500 ETF(VOO)$ (which track the S&P 500), $Invesco QQQ(QQQ)$ (tracking the Nasdaq-100), and $Roundhill Magnificent Seven ETF(MAGS)$ (tracking the Magnificent 7) to capture potential upside from a continued market recovery.
    ·       AI-related stocks outside the Magnificent 7, such as $ARM Holdings(ARM)$, $Palantir Technologies Inc.(PLTR)$ , $NVIDIA(NVDA)$, $Oracle(ORCL)$ , $Broadcom(AVGO)$ , and TSMC, continue to show strength amid renewed interest in risk assets.
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