The S&P 500 Index ($SPX) (SPY) is up +0.79%, the Dow Jones Industrials Index ($DOWI) (DIA) is up +0.73%, and the Nasdaq 100 Index ($IUXX) (QQQ) is up +0.98%.  June E-mini S&P futures (ESM25) are up +0.91%, and June E-mini Nasdaq futures (NQM25) are up +1.12%. 

Stock indexes today are climbing and recovering some of last Friday's selloff on hopes that hostilities between Israel and Iran will remain contained and not escalate throughout the Middle East.  WTI crude oil prices gave up sharp overnight gains and turned lower as the ongoing attacks have so far spared key oil export infrastructure in Iran.  There's also been no blockage of the vital Strait of Hormuz that handles about 20% of the world's daily crude shipments, although navigational signals from over 900 vessels moving through the strait have been disrupted due to "extreme jamming" of signals from the Iranian port of Bandar Abbas, causing confusion and increasing the risk of collisions.   

Hostilities between Israel and Iran entered a fourth day with no signs of easing.  Iran fired several waves of drones and missiles over the past 24 hours, while Israel continued hitting Tehran, killing more senior military officials. 

The Trump administration said the US is "not involved" in the military strikes.  However, the US might be drawn directly into the Israeli-Iranian conflict if Iran tries to block the Strait of Hormuz or Iran attacks US assets in the region, either directly or through proxies.  Aside from a potential military conflagration in the Middle East, the markets are worried about the disruption to the global economy from an upward spike in oil prices.

Today's US economic news is negative for stocks after the June Empire manufacturing survey general business conditions index unexpectedly fell -6.8 to -16.0, weaker than expectations of an increase to -6.0.

Investors will be watching the G-7 meeting in a resort town near Banff, Canada, through tomorrow as President Trump meets with his counterparts due to the possibility of new trade or tariff developments.  Investors are also bracing for negative tariff news over the next few weeks, following President Trump's announcement last Wednesday that he intends to send letters to dozens of US trading partners within the next one to two weeks, setting unilateral tariffs ahead of the July 9 deadline that came with his 90-day pause. 

The markets will also be focused on Tuesday's May retail sales report (expected -0.6% m/m and +0.2% m/m ex-autos).  Also, on Tuesday, May manufacturing production is expected to rise +0.1% m/m, and the June NAHB housing market index is expected to climb to 36 from 34 in May.  The FOMC's 2-day meeting begins on Tuesday and expectations are for the fed funds target range to remain unchanged at 4.25%-4.50%.   The markets will look to the Fed's dot-plot and post-meeting comments from Fed Chair Powell as to when the Fed may again ease policy.  On Wednesday, May housing starts are expected to fall -0.2% m/m to 1.359 million, and May building permits are expected to climb +0.2% m/m to 1.425 million.  Weekly initial unemployment claims will be released on Wednesday due to the Juneteenth holiday on Thursday and are expected to fall by -3,000 to 245,000. 

The markets are discounting the chances at 0% for a -25 bp rate cut at the Tue-Wed FOMC meeting.

Overseas stock markets today are higher.  The Euro Stoxx 50 is up +0.80%.  China's Shanghai Composite closed up +0.35%.  Japan's Nikkei Stock 225 closed up +1.26%.

Interest Rates

September 10-year T-notes (ZNU25) today are down -4 ticks.  The 10-year T-note yield is up by +3.4 bp to 4.432%.  T-note prices are under pressure due to concerns about inflation, fueled by an earlier surge in oil prices from the Israel-Iran war.  T-notes are also falling due to negative carryover from weakness in European government bonds.  In addition, supply pressures are weighing on T-notes as the Treasury will auction $13 billion 20-year T-bonds later today. 

European government bond yields today are moving higher.  The 10-year German bund yield is up +1.2 bp to 2.547%.  The 10-year UK gilt yield is up +0.6 bp to 4.556%.

Swaps are discounting the chances at 6% for a -25 bp rate cut by the ECB at the July 24 policy meeting.

US Stock Movers

Chip makers are rallying today and are supporting gains in the broader market.  Advanced Micro Devices  (AMD) and ON Semiconductor Corp (ON) are up more than +3%.  Also, Micron Technology (MU), Lam Research (LRCX),  ARM Holdings Plc (ARM),  and Marvell Technology (MRVL) are up more than +2%.  In addition, Applied Materials (AMAT), Broadcom (AVGO),  GlobalFoundries (GFS), NXP Semiconductors NV (NXPI), and Qualcomm (QCOM) are up more than +1%. 

Travel and hotel stocks are moving higher today as crude prices fall on optimism that the Israel-Iran conflict won't escalate.  Wynn Resorts Ltd (WYNN) and MGM Resorts International (MGM) are up more than +4%.  Also, Ceasars Entertainment (CZR), Carnival Corp (CCL), and Las Vegas Sands (LVS) are up more than +2%. 

Sage Therapeutics (SAGE) is up more than +35% after agreeing to be acquired by Supernus in a deal worth up to $12 a share.

Roku Inc (ROKU) is up more than +8% after announcing a partnership with Amazon.com that will allow advertisers to have access to more than 80% of US households with connected TV through the Amazon DSP marketing tool. 

US Steel (X) is up more than +4% after Nippon Steel won conditional US approval for its $14.1 billion purchase of the company. 

Incyte (INCY) is up more than +3% after reporting positive results of clinical data from two trials of its experimental therapy to treat a blood disorder.

Archer Aviation (ACHR) is up more than +3% after CEO Goldstein said it expects defense-related sales to outstrip demand for commercial taxis in the short term.

Smurfit WestRock Plc (SW) is up more than +2% after Jeffries upgraded the stock to buy from hold with a price target of $55. 

Sarepta Therapeutics (SRPT) is down more than -46% after Piper Sandler and BMO Capital Markets downgraded the stock on news that a second patient had died after being treated with its gene therapy for a rare muscle disorder. 

KalVista (KALV) is down more than -3% after the FDA said it won't meet the June 17 goal date for the company's New Drug Application for sebetralstat for treating hereditary angioedema due to its heavy workload and limited resources. 

Defensive managed care stocks are falling today with the recovery in the broader market. UnitedHealth Group (UNH) is down more than -1% to lead losers in the S&P 500 and Dow Jones Industrials. Also, Molina Healthcare (MOH) and Elevance Health (ELV) are down more than -1%. 

Freshpet (FRPT) is down more than -1% after UBS initiated coverage of the stock with a recommendation of sell and a price target of $65. 

Earnings Reports (6/16/2025)

Powerfleet Inc NJ (AIOT), Lennar Corp (LEN), Digital Turbine Inc (APPS).