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 stocks reversed earlier gains and ended the week lower as geopolitical tensions in the Middle East escalated sharply.
• Indexes had been buoyed by solid economic data and improving trade sentiment, but news of Israeli airstrikes on Iran and retaliatory attacks triggered a sell-off on Friday.
• The Dow Jones lost 1.32% and turned negative for the year, while small and mid-cap indexes underperformed; the Nasdaq and S&P 500 remained positive year-to-date but posted weekly losses.

Geopolitical Tensions: Oil Surges, Sentiment Shifts

• Markets climbed early in the week on reports of progress in US-China trade talks and comments from Treasury Secretary Bessent about possible tariff extensions, which supported investor optimism.
• However, sentiment turned sharply negative Friday after Israel launched airstrikes on Iranian military targets, with Iran reportedly responding in kind—spiking oil prices and dragging major indexes down.
• Energy stocks benefited from rising oil prices, but broader markets gave back weekly gains, reflecting renewed geopolitical risk.

Sentiment: Businesses and Consumers Show Rebound

• The NFIB small business optimism index rose to 98.8 in May, breaking a four-month downtrend and topping the long-term average.
• Consumer sentiment also improved sharply, with the University of Michigan Index jumping to 60.5 in early June, helped by fading tariff shock and policy stabilization.
• Inflation expectations fell notably to 5.1%, down from 6.6% the prior month, signaling easing pressure on household budgets.

Key Takeaways & Market Outlook

• Escalating Middle East tensions reversed early market optimism and boosted oil prices.
• Inflation data came in softer than expected, giving Treasuries a temporary lift.
• Business and consumer sentiment rebounded, though policy and geopolitical uncertainty still weigh heavily.

Word of the Week

Main features of Musharakah include joint investment, profit-sharing based on agreement, and loss-sharing according to capital contribution. All partners have the right to participate in management unless they delegate this responsibility.

Musharakah is commonly used in Islamic project financing, asset acquisition, and business partnerships.

Example: Two entrepreneurs contribute $50,000 and $100,000 respectively to start a halal trading business. Profits are shared 40:60 as agreed, but any loss is shared strictly in proportion to their capital, one-third and two-thirds.

Musharakah promotes fairness, cooperation, and shared responsibility, ensuring that all parties benefit or bear risk justly.

Disclaimer: The content is for informational purposes only and does not constitute legal, investment or financial advice.
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