Global Market News
Global Equities Declined
Global equities declined on the week as Israel and Iran exchanged attacks, while oil prices surged and the price of gold increased amid the geopolitical instability. The S&P 500 and Nasdaq ended the week down 0.39% and 0.63%, respectively, and the Dow Jones declined 1.32% on the week. The U.S. 10-year Treasury note dropped several basis points back down to 4.40%, while the price of West Texas Intermediate crude oil skyrocketed 13% to $72.98 per barrel. Volatility, as measured by the CBOE Volatility Index, rose sharply on Friday, closing at 20.82.
US Inflation Remains Subdued
U.S. inflation remained low in May, with both consumer and producer prices rising just 0.1% month-over-month, and core inflation at 2.8% annually. These subdued figures increased expectations for two Federal Reserve rate cuts this year and contributed to falling bond yields. Goldman Sachs analysts noted that recent data suggest tariffs are having a smaller-than-expected impact on inflation, consumer spending, and financial conditions. As a result, and amid easing trade uncertainty between the US and China, Goldman Sachs raised its 2025 GDP forecast from 1% to 1.25% on a quarterly basis and lowered its recession probability to 30%. However, the full effects of tariffs remain to be seen.
International Developments
Israel Strikes Iran
Israel launched a preemptive strike on Iran’s nuclear and military sites on Friday, killing four senior commanders, including Islamic Revolutionary Guard Corps (IRGC) head Maj. Gen. Hossein Salami. Iran initially responded by launching over 100 drones, which Israel began intercepting, and has since escalated retaliatory attacks with missiles. The two countries exchanged deadly waves of attacks on Saturday with no signs that either side is heeding international calls for de-escalation. Iranian Supreme Leader Ayatollah Khamenei vowed “severe punishment,” while U.S. President Trump urged Iran to “make a deal with Israel before it’s too late,” warning of harsher future strikes. The assault targeted Tehran and Natanz, aiming to cripple Iran’s nuclear and missile programs. This comes after the U.S. began reducing its presence in the region earlier this week amid fears of an imminent Israeli strike on Iran.
Colombia Faces Surge in Terror and Political Violence
Colombia has been rocked by over 24 terrorist attacks since June 8th, including a car bombing in Patía, Cauca, and a bus explosion outside a police station in Villa Rica, killing at least seven and injuring dozens. These attacks follow the June 7th assassination attempt on presidential candidate Miguel Uribe in Bogotá, intensifying fears of a return to 1990s-era violence. The conflict, driven by drug-trafficking groups and dissident FARC factions like Iván Mordisco’s, has displaced over 65,000 people in 2025 alone. President Gustavo Petro’s vague response and crumbling fiscal discipline—alongside a weakening peso and rising CDS spreads—are stoking public anxiety ahead of Colombia’s May 2026 presidential election.
Pakistan Boosts Defense Budget 20% After India Military Confrontation
Pakistan announced a nearly 20% defense spending increase to $9 billion following last month’s military confrontation with India that brought the nuclear-armed rivals to the brink of war. Finance Minister Muhammad Aurangzeb told Parliament the budget boost requires slashing subsidies, while China offered Pakistan new military equipment, including fighter jets and missile defense systems. During May’s aerial combat, India struck targets including Rawalpindi air base, with Pakistan claiming to have downed at least five Indian warplanes using Chinese equipment. The increase comes amid Pakistan’s severe economic crisis and ongoing IMF bailout negotiations.
US Social & Political Developments
China Trade Deal Announced as U.S. Considers Extensions for Other Nations
On June 11th, President Trump declared a U.S.-China trade deal “done” following talks in London, securing rare earth exports and student visa access while leaving 55% tariffs on Chinese imports intact. Treasury Secretary Scott Bessent told Congress that 18 key trading partners could receive deadline extensions beyond July 9th to finalize their own deals, depending on negotiation progress. The original 90-day tariff pause, set to expire next month, affects levies on over $200 billion in global trade, including steep 50% duties on steel and aluminum. While talks with Mexico and the EU continue, analysts warn investors that high tariffs may remain even after new agreements are reached.
Nationwide Protests Erupt Over Immigration Raids and Military Deployment
Protests that began in Los Angeles on June 6th against ICE raids and President Trump’s deployment of 4,000 National Guard troops and 700 Marines to address riots have spread to over 20 U.S. cities, including Chicago, New York, and San Francisco. California filed a federal lawsuit Monday alleging Trump’s use of military force violated constitutional limits, as Governor Gavin Newsom warned other states could be next. Federal agents have made over 500 arrests in Los Angeles alone, with clashes involving tear gas, curfews, and vandalism prompting further unrest. The Pentagon estimated the troop deployment will cost $134 million, and protests are expected to peak on June 14th during Trump’s planned military parade in Washington, D.C.
Corporate/Sector News
Saudi Arabia Ramps Up Oil Supply to Pressure Rivals, Risks Budget Deficit
Saudi Arabia has accelerated oil production, aiming to reclaim market share by flooding a weakening global market, with OPEC+ on track to restore over 2 million barrels per day by fall. Before the Israel attack on Iran on Friday, Brent crude had fallen 8% to $69 per barrel since April, pressuring high-cost U.S. shale producers, whose frack crew activity has dropped over 20% this year. Riyadh, able to break even at $35 per barrel, is aligning with President Trump’s preference for $40–$50 oil, potentially gaining political favor while disciplining overproducing OPEC members. However, the strategy risks deepening Saudi Arabia’s fiscal shortfall, with oil revenues down 18% in Q1 and a projected budget deficit if Brent averages $62. However, the escalation in tensions between Israel and Iran is already having major effects on oil prices.
Boeing Stock Plunged 5% After First-Ever 787 Dreamliner Crash
Boeing Co. shares plunged 5.1% on Thursday, after an Air India Boeing 787-8 Dreamliner crashed in India, killing over 200 people— the first-ever crash involving this aircraft model. The $10.84 stock decline cut 67 points from the Dow Jones Industrial Average, threatening Boeing’s recent rally. The crash raises serious investor concerns about Boeing’s recovery from 2018-2019 737 Max troubles, coming days after the company agreed to pay $1.1 billion to avoid prosecution. Despite remaining up more than 16% for 2025, analysts warn the incident could undermine Boeing’s recent progress in restoring confidence.
Meta Launches New AI Lab for Superintelligence, Taps Scale AI’s Wang
On June 10th, Meta announced a major reorganization of its AI division, creating a new lab focused on developing “superintelligence” and recruiting Scale AI founder Alexandr Wang, 28, to lead the effort. As part of a multi-billion-dollar investment deal with Scale AI, Meta is also bringing in key staff and offering top AI talent massive pay packages to compete with OpenAI, Google, and Amazon. CEO Mark Zuckerberg, who has invested heavily in AI integration across Meta’s products, sees this move as critical to regaining leadership in a global AI arms race. The effort comes amid internal struggles, staff departures, and rising regulatory scrutiny from the Federal Trade Commission.
Corporate Profile
Bristol Myers Squibb: Strategic Focus on Specialty Drugs and Oncology Growth
Bristol Myers Squibb (BMY) focuses on high-margin specialty pharmaceuticals, leveraging strategic acquisitions and partnerships to build a robust pipeline in oncology, cardiology, and neurology. Its recent $11+ billion deal with BioNTech to co-develop cancer drug BNT327 adds to a string of transformative acquisitions, including Celgene, Karuna, Mirati, and RayzeBio. The company’s strategy of sharing development costs—exemplified by its Eliquis partnership with Pfizer—helps manage risks while boosting commercial reach. With strong franchises like Opdivo and new drugs like Camzyos and Cobenfy, BMY is well-positioned for growth despite looming patent cliffs.
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Video of the Week
DoubleLine’s Gundlach Says ‘Reckoning Is Coming’ for US Debt
Source: Bloomberg
