Over the past few months, markets have been roiled by a series of extraordinary and unusual events—many of which might only occur once in a decade. Amid heightened uncertainty stemming from protracted tariff negotiations, geopolitical tensions in the Middle East surged as conflict escalated between Israel and Iran. In a dramatic development, the U.S. deployed B-2 bombers over a weekend to strike Iran’s nuclear facilities, prompting a swift decline in equity market futures.
Oil prices surged to approximately $78 per barrel on concerns that Iran might retaliate by disrupting the oil supply route through the Strait of Hormuz. However, as fears eased, equity futures recovered, and oil ultimately ended the month of June near $65 per barrel.
A tentative ceasefire agreement between Israel and Iran—fragile though it may be—provided further relief, helping markets rally. For the month of June, the S&P 500 rose 4.96 percent, while the yield on the 10-year Treasury fell roughly 17 basis points (0.17%) to 4.24 percent.
To underscore just how extreme this market environment has been: the NASDAQ Composite posted its worst start to a year through mid-April since its inception, only to reach an all-time high by the end of June—a remarkable reversal.
Despite market enthusiasm surrounding tariff developments, the actual substance behind the headlines has been minimal. Much of the optimism is based on pauses or vague assurances rather than concrete agreements. For instance, Commerce Secretary Lutnick claimed that a trade deal with China had been completed, a statement echoed by President Trump, who then acknowledged a signed trade “truce” with China—a notable improvement when contrasted with the earlier threat of 145 percent tariffs. Still, significant challenges remain. China has reportedly imposed a six-month limit on rare-earth exports, and many semiconductor firms remain in the dark about what trade rules with China will ultimately look like.