Stocks Decline amid Escalating tensions in the Middle East

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

6.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week of Jun 13, U.S. stocks reversed early gains amid of escalating military confliction between Iran and Isarael. The Dow Jones Industrial Average(DJI) shed 1.32% and dropped back into negative territory for the year. The S&P 500 Index(SPX) and Nasdaq Composite(COMP) fell to a lesser extent and remained positive year-to-date.

Major indexes were broadly higher through Thursday, buoyed by some better-than-expected economic data releases as well as reports that trade talks between the U.S. and China had led to a preliminary agreement to ease recent trade tensions. However, sentiment quickly turned negative on Friday morning on news that Israel had launched a series of airstrikes targeting Iran’s nuclear facilities and military leaders, with a pledge of more attacks to come, to which Iran reportedly responded with a retaliatory attack later on Friday. The significant escalation in tensions sent oil prices surging, benefiting energy stocks, while the broader indexes fell sharply and gave back gains from earlier in the week. Refer to below major indexes weekly performance tables.

Key highlights for the week and next:

1.    Consumer Sentiment for June improves according to report released on Friday. The University of Michigan’s index of Consumer Sentiment improved to 60.5 from 52.2 in May, snapping a six-month streak of declining readings. 

2.    Inflation has remained contained thus far in 2025. May data for both CPI and PPI inflation reported in the week surprised to downside, with headline CPI around 2.4%, and PPI around 2.6%. It appears that the inflation is approaching to Fed’s 2.0% target. 

3.    Oil and energy prices under spotlight due to the impact of geopolitical tension in the Middle East. The crude oil future spike up around 13% in the week to 73.18 per barrel after Israeli launched military strike on Iran. Historically, these sharp moves in commodities prices driven by geopolitics tend to be short-lived. 

4.    Tariff and trade negotiations in the weeks ahead continue in focus. China and the U.S. have established a trading “framework” this week. The ones watching most closely is a potential deal with China and the July 9 end of the 90-day pause with other major trading partners. 

5.    U.S. tax bill and Fed rate cuts will be watching closely as well. Trump’s “One Big Beautiful Bill Act” is pending vote in the Senate ahead of Jul 4. And It’s expected the Fed will have two rate cuts in the second half this year. 

SPX sectors in play

Five out of 11 SPX sectors recorded weekly gains, Energy(XLE) is clearly a top winner attribute to crude oil price spike up. Healthcare(XLV) and Technology (XLK) also among the top gainers while Financials( XLF) lagged. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

Better economic and inflation data has been reflected in recent stock-price movements. The SPX has rebounded over 20% since its Aril 7 low. However, do expect in the weeks ahead due to tariffs and geopolitics tension. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets declined as the latest inflation snapshot underscored the deflationary pressure weighing on China’s economy. The Shanghai Composite Index(SSE) and the blue-chip CSI 300 both shed 0.25%. In Hong Kong, the benchmark Hang Seng Index edged up 0.42%. (refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    China’s consumer price index declined in May for the fourth straight month year on year, the country’s statistics bureau reported. Factory deflation continued for the 32nd straight month, with producer prices sinking the most in nearly two years, according to Bloomberg. Deflation is regarded as a fundamental economic challenge for China, where a multiyear property crisis has sapped domestic demand. Economists’ outlook for prices in China remains weak despite a more bullish view of the broader economy in the near term after Beijing and Washington agreed to a temporary tariff reprieve in May. 

2.    Chinese stocks rose to their highest level for the week on Wednesday on news that officials from China and the U.S. agreed on a preliminary deal to reduce trade tensions following a two-day meeting in London. Details regarding the deal were scarce, however, and are pending approval from the respective leaders of both countries.

Refer to below .HSI stocks top 40 performance of the week.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) was down 0.58% to close at 3911.42 point this week. The index has gained more than 16% since Apr 9 low this year, has been in sideway consolidation for the past five weeks. Overall uptrend is well intact.

Refer to below table for STI index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.