Inflation Slows, But Global Conflict Weighs on Markets
Market Recap for the Week of June 15, 2025
It was a flat week for the U.S. stock market. The market performed fairly well through the first half of the week, especially after the latest inflation report showed prices rose by only 2.4% year over year.
However, there was some weakness on Friday. The drop in stock prices is likely related to the escalation that occurred between Israel and Iran on Thursday night. Defense stocks posted strong gains on Friday, which tends to happen during periods of increased global military conflict. Oil prices also jumped by nearly 9% on Friday morning—another common occurrence during heightened tensions in the Middle East. This makes sense, as conflict in the region can disrupt supply chains, restrict oil supply, and put upward pressure on global oil prices.
The next major event to watch is the Federal Reserve’s interest rate decision, which is scheduled for this coming Wednesday. Market participants are currently pricing in a 99.6% chance that there will be no change in the federal funds rate. In other words, no one expects the Fed to cut rates this week.
“Stocks were flat last week—steady inflation offered relief, but Middle East tensions rattled markets.”
Chart of The Week
This week’s chart highlights the changing landscape of electricity production in the United States. Over the past two decades, the country has become significantly less reliant on coal as a source of power. In its place, natural gas has taken on a much larger role in energy generation.
At the same time, renewable energy sources have steadily grown and now represent a meaningful share of electricity production. We're not drawing any investment conclusions from this data—it’s simply a noteworthy shift in how the U.S. generates power and how that mix continues to evolve over time.
The commentary in this blog is for informational purposes only and should not be taken as personalized investment advice
Chart Source: J.P. Morgan Asset Management; (Left and bottom right) EIA; (Top right) McKinsey & Company. (Left) Data are from the EIA “March 2025 Monthly Energy Review” report. *Forecasts are from the April 2025 EIA Short-Term Energy Outlook. **Renewables include wind, solar, geothermal, biomass waste, biomass wood and hydroelectric. (Right) ***Forecasts are from the International Energy Agency (IEA) – Global EV Outlook 2024 and are made assuming its “STEPS” outlook. The State Policies Scenario (STEPS) outlook from the IEA does not assume governments will meet announced policy goals and instead looks at what the IEA considers feasible given current progress.
Guide to the Markets – U.S. Data are as of June 12, 2025.
