Market Summary
June was a relatively calm month for the markets after all the tariff news as of late, plus tensions once again rising abroad in the Middle East. Now as the tariff deadlines approach, we are starting to see some volatility come back into play. The broad S&P 500 moved higher by 4.96% in June with the Nasdaq 100 gaining 6.27% and the Russell 2000 coming in at 5.26%. (1)
Israel and Iran
What looked at first to be a major conflict in the Middle East that had the potential to spread into a larger matter turned out to end fairly quickly without large loss of life. We saw missiles being fired into both Israel and Iran with most targets being military installments. Within the first week of the conflict, it was becoming clear that Iran’s defenses were much weaker than most anticipated and their military suffered large losses including damage to their weapon making buildings and several aircraft being destroyed, including some of their infamous American-made F14 Tomcats. (2)
The final exchanges in this conflict saw America get involved by using bunker busting bombs on three Iranian nuclear installations. The response from Iran was very muted by launching missiles onto a US airbase in Qatar but strangely giving warning in advance that the attack was coming. This signaled to many people and the markets that this conflict would more than likely end at that point given Iran’s extensive damage to their fighting capabilities and Israel’s content with the nuclear installation bombings. (3)
Tariff News
With the Middle East conflict under control for now, the markets have begun to re-focus onto President Trump’s 90-day reciprocal tariff deadline on July 9th. Over the holiday weekend, the President stated that all higher rate tariffs initially announced back in April would be put into effect by August 1st unless each country can negotiate a deal with the President’s team beforehand. If you recall, each country would have a separate tariff rate which is customized according to the US’s trade deficit with that country. These rates range from the low teens all the way up to 50% with the average rate being around 30%. (4)
As the July 9th deadline approaches, the Trump Administration has begun announcing tariff rates. As of today and the writing of this newsletter, Trump announced 25% tariffs on Japan, South Korean, and Kazakhstan. South Africa’s tariffs would be 30%, with Malaysia and Myanmar coming in at 40%. While these could be more hard negotiation tactics, the markets are beginning to take these matters more seriously again as negotiations appear to be stalling after three months.
Looking Forward…
As has been the case for the past several months, we are in a “wait and see” mode and subjected to headline risk moving into the middle of the summer. While the markets largely paused and ignored the tariff threat and what that could mean for global growth, we will be getting more of a reality check as we move towards August with volatility likely increasing.
The Federal Reserve continues to hold the course with interest rates, meaning the risk of stagflation – slowing growth and rising inflation – remains at the forefront of the Fed’s concerns. If tariffs begin to impact inflationary pressures again, the central bank would have little incentive to lower interest rates and they may even be forced to raise them back higher again.
Monthly Financial Tip:
Including provisions in your estate planning documents which allows your heirs to individually disclaim some or all of their inheritance is a little known way to potentially leave more of your estate to charity. The disclaimed portion of the inheritance that is donated to charity is not subject to estate tax.
Citations:
1. Charles Schwab, June 30, 2025
2. New York Post, June 16, 2025
3. Axios, June 23, 2025
4. The White House, April 5, 2025
Disclaimers:
This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
