U.S. enters Iran Fight—What’s next? 23/06/2025

HOT stories for today

US market wrap:

• Two of Wall Street’s three major indexes ended lower last Friday, as market participants weighed rising geopolitical risks in the Middle East against growing speculation over upcoming Federal Reserve rate cuts. The S&P 500 slid 0.22%, marking its third straight session of declines. The tech-heavy Nasdaq Composite fell 0.51%. Meanwhile, the Dow Jones Industrial Average managed a modest gain, inching up 35.16 points. Markets opened on a positive note following comments from Federal Reserve Governor Christopher Waller, who signaled that rate cuts could begin as early as July. However, the early optimism faded in the afternoon as investors grew cautious heading into the weekend.
• Sentiment turned sharply risk-off on Saturday night amid intensifying regional unrest. The United States reportedly joined Israel’s conflict with Iran, launching strikes on three nuclear facilities—a move authorized by President Donald Trump. The military escalation fueled a spike in oil prices and heightened fears of a broader regional war, prompting many investors to reduce exposure ahead of the weekend.

U.S. enters Iran Fight—What’s next?

• The United States’ recent airstrikes on Iranian nuclear facilities signal a dramatic shift in former President Donald Trump’s foreign policy stance and his 2024 campaign rhetoric, which emphasized avoiding military entanglements and preventing a wider Middle East war. Just two days earlier, Trump suggested a diplomatic pause to see if tensions between Israel and Iran could cool. Instead, Saturday’s coordinated U.S. strikes brought Washington into direct military conflict with Tehran, sparking global concern and renewed scrutiny of Trump’s credibility on peace and diplomacy. Iran swiftly condemned the strikes as a violation of its sovereignty, with Foreign Minister Abbas Araghchi calling the attack “outrageous” and warning that all options remain on the table. Tehran responded by launching its 20th wave of missile and drone attacks on Israeli military targets.
• In retaliation, the Israel Defense Forces reported fresh missile offensives targeting western Iran, as tensions between the two regional powers continued to spiral. The U.S. intervention has heightened fears of a broader war and raised concerns that efforts toward a diplomatic resolution may have collapsed. Iranian officials accused both the U.S. and Israel of sabotaging recent peace efforts. Despite the geopolitical escalation, financial markets responded with relative composure. “The markets view the attack on Iran as a relief, with the nuclear threat now gone for the region,” said Dan Ives, managing director at Wedbush Securities, suggesting investors see the strikes as a stabilizing move rather than the start of prolonged conflict.

Stocks on the move:

• CarMax (KMX) — Shares surged 6% after the used car retailer posted fiscal first-quarter earnings that topped Wall Street forecasts. CarMax reported earnings of $1.38 per share on revenue of $7.55 billion, exceeding the consensus estimates of $1.16 per share and $7.52 billion in revenue, according to LSEG data.
• Semiconductor Stocks (SMH) — Chipmakers came under pressure following a Wall Street Journal report indicating that the U.S. government is considering revoking key export waivers that allow leading semiconductor firms to supply American technology to China. Nvidia (NVDA) slipped nearly 1%, while KLA Corp (KLAC) fell 2%. The VanEck Semiconductor ETF (SMH) also traded lower.
• Circle (CRCL) — Shares extended their rally Friday, jumping 18%, as traders welcomed Senate passage of the proposed stablecoin regulatory framework, known as the GENIUS Act. The stock is now up 70% for the week.
• Kroger (KR) — The supermarket chain climbed 9% after delivering stronger-than-anticipated first-quarter results. Excluding certain items, Kroger earned $1.49 per share, beating analyst expectations of $1.46 per share, as per LSEG. The company also reaffirmed its full-year earnings outlook.

                                     Watchlist: LMT, COIN, RBLX, NVDA, AMD, MU, AAPL, KMX, XOM



Today’s action

• Markets across the Asia-Pacific region declined on Monday, as investors reacted to the United States’ weekend strikes on three nuclear sites in Iran—an escalation that pushed oil prices higher and stoked fears of a broader Middle East conflict. In Japan, the Nikkei 225 slipped 0.32%, while the broader Topix index declined 0.43%. South Korea’s Kospi fell 0.41%, and the tech-heavy Kosdaq tumbled 1.42%. Meanwhile, Hong Kong’s Hang Seng Index edged down 0.13% in early trading.
• U.S. stock futures also moved lower ahead of Monday’s open. Futures linked to the Dow Jones Industrial Average dropped 126 points, or 0.3%, while S&P 500 futures were down 0.26% and Nasdaq 100 futures declined 0.35%. Investors are now bracing for a potential Iranian retaliation, which could include targeting U.S. personnel at regional military bases or disrupting global oil supply by closing the Strait of Hormuz. Analysts warn that a prolonged blockade of the key shipping route could propel oil prices above $100 per barrel. On the economic calendar, traders are watching closely for U.S. Flash Manufacturing and Services PMI data, as well as existing home sales figures, which could provide further insight into the health of the economy amid rising geopolitical uncertainty.

Bitcoin

• Bitcoin tumbled to its lowest level since May over the weekend, as escalating Middle East tensions and revived inflation concerns sparked a broad selloff in digital assets. The world’s largest cryptocurrency briefly dipped below the $99,000 threshold on Sunday—marking its weakest level in over a month—while ether plunged more than 10% at one point, reflecting heightened investor sensitivity to geopolitical risk.
• Other major altcoins, including Solana (SOL), XRP, and Dogecoin (DOGE), also suffered heavy losses, dragging the broader crypto market sharply lower. By late Sunday, however, the digital asset space showed signs of stabilization. Bitcoin had rebounded slightly, trading just below $101,000—down roughly 1% over the prior 24 hours—while ether (ETH) trimmed earlier losses, down about 2.5% to around $2,200.
  Watchlist: Bitcoin: 99 000-112 000, Ethereum:1500-2800, Solana: 80-183

Forex

• EUR/USD extended its rally into a fourth session on Monday, hovering near 1.1490 during Asian trading. The pair is testing resistance at the nine-day EMA of 1.1494, with the 14-day RSI holding above 50, signaling continued bullish momentum. Support is seen at the ascending channel’s lower boundary near 1.1420.
• Meanwhile, USD/JPY rose above 147.00, as the Japanese Yen (JPY) weakened for a third straight day. Markets pushed back BoJ rate hike expectations to Q1 2026, despite strong CPI and PMI data. Concerns over U.S. tariffs on Japanese goods also weighed on the yen.
  Watchlist: EUR/USD: 1.0700-1.1650, USD/JPY: 140-151

Basic Materials

• WTI crude climbed to near $74.80 in Monday’s Asian session, hitting its highest level since January. The surge follows U.S. airstrikes on Iran, stoking fears of potential supply disruptions from the Middle East, particularly through the vital Strait of Hormuz. However, expectations of softer demand may limit further gains.
• Meanwhile, gold (XAU/USD) is facing resistance near the $3,400 mark, unable to build on its modest early gains. A stronger U.S. Dollar (USD)—buoyed by geopolitical tensions and a hawkish Fed outlook—is weighing on the metal. Traders are now eyeing global flash PMI data for fresh direction.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-75.80
  
   

Key Economic Events Today:

EST time
09:45 am: USD Flash Manuf., Services PMI
10:00 am: USD Existing Home Sales
10:00 am: USD FOMC Member Bowman Speaks
01:10 pm: USD FOMC Member Goolsbee Speaks
02:30 pm: USD FOMC Member Kugler Speaks



Earnings

BMO (Before the US Market opens)
FDS              FactSet Research System
CMC             Commercial Metals Company
AMC (After the US Market closes): KBH

The TEFS Analyst team wishes you a successful day!