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Assalamu Alaykum,
Here’s a quick recap of what happened in the US stock market last week. From major index movements to key economic events, stay informed about the trends that matter to halal investors like you.
Market Overview
- US stock indexes ended the shortened week mixed as investors navigated Fed signals and developments in the Middle East.
- President Trump’s comments about a “substantial chance of negotiations” with Iran helped lift sentiment late in the week, especially on Friday.
- Smaller-cap indexes led performance, followed by modest Nasdaq gains, while the Dow was flat and the S&P 500 edged lower; markets were closed Thursday for Juneteenth.
Fed Policy: Rates Steady, Outlook Dims
- The Fed kept its policy rate unchanged at 4.25% – 4.50%, marking a fourth straight pause, while stating uncertainty “has diminished but remains elevated.”
- Fed projections still show two cuts expected in 2025, though inflation and unemployment forecasts were revised up, and GDP growth was revised down.
- Despite the cautious Fed tone, Governor Waller’s Friday remarks hinting at possible July rate cuts offered stocks a brief lift.
Economic Data: Retail Weakness, Housing Struggles
- Retail sales declined 0.9% in May, following April’s dip, dragged down by falling auto sales post-April tariffs, though control group sales rose 0.4%.
- Housing data was weak: the NAHB index fell to 32 in June, a new 2023 low, and housing starts sank nearly 10% to levels not seen since May 2020.
- Tariffs, high mortgage rates, and economic uncertainty are keeping buyers—and builders—on the sidelines.
Bond Markets: Treasuries and Credit Rally
- Treasury yields dropped amid geopolitical and macroeconomic uncertainty, generating positive returns across most maturities.
- Investment-grade corporate bonds advanced with strong demand, while high-yield sentiment softened due to equity market volatility.
- Despite caution, the high-yield primary market remained active ahead of the Juneteenth holiday.
Weekly Market Performance Summary
Key Takeaways & Market Outlook
- FED held rates steady and cut its 2025 growth outlook, though rate cuts may come sooner.
- Retail and housing data showed fresh signs of consumer strain and construction slowdown.
- Markets fluctuated but found some relief from easing tensions in the Middle East and dovish Fed signals.
We hope this update sheds light on the economic shifts that may impact your financial decisions.
Word of the Week
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