Where Are Markets Today?
As U.S. and European futures fell, the markets opened on the defensive. Dow futures fell around 136 points (-0.32%), S&P 500 futures fell 0.34%, and Nasdaq 100 futures fell around 0.4%. In Europe, Stoxx 600 broad index futures fell around 0.6%, and DAX futures of Germany fell 1.7%. Markets are responding to heightened geopolitical uncertainty—at a time of revived tensions between Israel and Iran with President Trump’s stern ultimatum to “immediately vacate Tehran.” Overnight, crude prices rose around 2% on fears of supplies disruption further propelling risk-off sentiments and pushing investors to safe havens.
Why are markets opening lower? First, geopolitical tensions have reappeared at the forefront. New reports of aerial attacks and threats of potential escalation within the Israel‑Iran conflict are dampening investor mood, with geopolitical risk premiums bearing down on both U.S. and European futures. Secondly, the rise in crude prices—over 2% higher for Asian business—reignites concerns about increasing input prices and inflation, and might lead central banks to maintain money more firmly for a longer period. Coupled with investor nervousness ahead of the pivotal central bank meetings later this week, these factors have market mood on tenterhooks.
Despite a bullish Monday session on U.S. majors—+300 points on Dow, +0.9% on S&P 500, +1.5% on Nasdaq—morning futures suggest a soft start. Lower crude prices on Monday helped to lift mood, but today’s sudden geopolitical event reversed earlier gains and tips the risk balance decisively to caution. While markets alternate between geopolitics and macro uncertainty, volatility is likely to remain high short term.
Key Index performance on June 17, 2025
- S&P 500: Trading at 5,912.80, down 0.2% intraday.
- Nasdaq Composite: down 0.5% at 13,690.40 with technology still under pressure.
- Dow Jones Industrial Average: A narrow increase at 38,672.40, increasing 0.1% on the strength of energy.
- Russell 2000: Down 0.4% at 2,084.20, a reflection of small-cap susceptibility to consumer spending fears.
The Magnificent Seven and the S&P 500
The “Magnificent Seven” all saw broad selling pressure, with Nvidia and Tesla declining more than 2% on fears of potential U.S. export bans. Apple and Microsoft also declined with investors getting cautious ahead of Q2 earnings season. This pullback has surpassed the momentum within the S&P 500, with the strength now shifting to energy, utilities, and some industrials. Mega-cap fatigue is beginning to be felt, with increasing breadth but smaller aggregate increases.
Drivers Behind the Market Move – Tuesday, June 17, 2025
The U.S. and European markets began on the back foot on Tuesday, burdened with a new batch of geopolitical worries and mixed economic signals. Futures fell sharply at the session’s commencement on the heels of overnight reports that kindled investor worries—from President Donald Trump’s directive to exit Tehran to higher crude prices and poor U.S. consumer numbers. Defensive sentiments ensued following a strong Monday rally, however, and the market is now pricing more volatility. Here are the three underlying fundamental drivers of today’s market mood:
1. Geopolitical Tension within the Middle Eastern Region
The Israel–Iran conflict is back in the limelight following President Trump’s provocative post last evening urging a quick evacuation of Tehran. His warning triggered a knee-jerk selloff in US futures and a 2% rise in the price of WTI crude. The sudden spike is generating fears of a disruption to the supply chain, adding to the pressure on inflation and risk-sensitive assets. European markets are particularly exposed, given their dependence on Middle Eastern energy, with DAX futures collapsing following the geo-political tensions.
2. Trump’s Policy Rhetoric and Market Positioning
Aside from military commentary, Trump’s economic tweets are also propelling markets. Whether decrying the Fed—”They raise, they wreck, then hide”—or boasting with such phrases as “Buy American” and “Cut the Red Tape,” Trump is generating expectations of a movement to protectionist and deregulation-oriented policy environments. Investors are beginning to price the potential fiscal stimulus, deregulation of the energy sector, and potential tariff regimes of a hypothetical second term. That is promoting sector rotation: energy anddefense stocks are up, and technology and consumer names see more cautious flows.
3. Softer U.S. Retail Numbers and Pending Economic Reports
Yesterday’s Retail Sales numbers were lower than anticipated, and this has added to today’s Retail Sales and Core Retail Sales m/m prints that market participants will scrutinize to try to gauge if this is a sign of problems with consumer demand. A second poor print will increase bets on Fed rate cuts later on that will have some impact on the dollar, Treasury yields, and equities sensitive to growth. But in the meantime, the contradicting economic environment of poor consumer statistics and increasing political noise is favoring a defensive market strategy on both sides of the Atlantic.
DIGESTING ECONOMIC DATA
The TRUMP Tweets and Their Implications
Trump’s tweet storm of the past 24 hours has rekindled political and economic tumult on financial markets. From “The economy was never better under my watch” to jibes at the Fed—”They rise, they crash, then hide”—Trump has launched a unified digital attack on prevailing macroeconomic Orthodoxy. His tweets, echoed by rallies, video clips, and proxy campaign activity, aren’t just campaign hyperbole—They’re impacting investor mood in real time. With inflation, jobs, and rates again at the forefront, markets are beginning to price into the potential role of a Trump presidency on direction of policy, regulation, and economic strategy.
Trump’s revived focus on energy independence and outrage at inflated gas prices—”Gas was $1.87. Never forget”—have already created speculative flows to energy and oil shares, with investors betting on a reversal of green transition policy to fossil-fuel dominance. Meanwhile, his revival of trade policy with its nationalistic appeal to “Buy American” predicts a return to tariffs, thus far having torn apart international supply chains and leaving the trail of inflationary pressure behind. If investors start expecting a more protectionist outlook, risk premia on cross-border shares might rise, with commodities and safe-haven currencies such as gold and Bitcoin profiting from heightened volatility and loss of confidence in fiat regimes. Most importantly, Trump’s attacks on central bank leadership and the Federal Reserve—branding those at the Fed as politically motivated and reckless—can undermine public and institutional confidence in central bank independence. Not only does this create space for bond market volatility but also directs investor demand to decentralized or policy-insensitive instruments. No surprise that Bitcoin was trading at over $113K as Trump retweeted BTC donation links and his devotees cast the cryptocurrency as a hedge against “corrupt banks.” Trump’s own words—”Inflation occurs when you print. Bitcoin doesn’t.”—have now been adopted as ideology grist to share on financial social media, with the potential to remake the macro-narrative on digital assets.
We at Zaye Capital Markets subscribe to the view that Trump’s never-ending media storm is more than a headline storm—it is a potential catalyst for repositioning. Whether energy, precious metals, digital currencies, or defensive sectors, his words increasingly shape near-term flows and longer-term expectations. With politics now aligning with the macro cycle, markets now have to begin to factor not only central bank guidance but also political volatility into capital allocation.
Sentiment Recovers, But Tariff Clouds Persist
The modest pick-up in consumer confidence captured in the June 2025 University of Michigan survey foreshadows a tentative turn in economic expectations—albeit provisionally. While the numbers reflect a modest gain to shatter years of negativity, we read this move more as short-term respite following a spell of intense macro-economic stress rather than a definitive change of direction. That the decline in year-ahead inflation expectations—to 5.1% from 6.6%—occurs against the background of festering tariff tensions and delicate world trade flows lends it some relevance. At Zaye Capital Markets, we view this dynamic to invite scepticism of story-based positioning, particularly where this is at odds with more concrete cues such as earnings adjustments and payrolls numbers.
Historically, such sentiments–in the aftermath of past economic shocks–have typically failed to come to fruition unless supported by business investment or broader labor market forces. Repeated volatility of business confidence surveys, combined with high producer prices and geopolitical tensions, tests the value of such initial signals. If, with declining inflation, shopping rhythms and disposable income take their cue, the real test is to establish whether such a subsequent rebound has any momentum, given trade tensions that are on the verge of denting price stability on core items.
On a positioning basis, we believe undervaluing is emerging on select consumer discretionary names that have been unfairly penalized at past turns in sentiment. Those with high domestic revenue exposure and low sensitivity to external tariffs appear to be most well positioned to benefit at any stabilization of consumer expectations. Analysts will be paying attention to whether real wage growth and retail trends stabilize through Q3, and will be watching intently at tariff developments that might upset gains in sentiment. At Zaye Capital Markets, we have a very simple view: sentiment is fine, but only to the extent that it is underpinned by underlying, fact-based improvements.
Consumer Job Prospect Index Signals Labour Stability
The University of Michigan’s most recent survey numbers, graphed on a June 2025 chart, reflect a modest but important decline in expectations of rising joblessness. While the gauge has traditionally followed extreme volatility through business cycles such as those of 2008–2009, its moderation here is indicative of a more stable labour market story. With the unemployment rate not altering at 4.2% last month, such a change of mood is potentially a retracking of cross-spectrum recession fears earlier this year. It is a potential leading signal of economic normalization at Zaye Capital Markets.
Although headline unemployment has been stable, the relaxation of consumer nervousness is also being fueled by muted layoff rates and steady hiring advertisements within core service and construction sectors. This is a departure from more unstable previous cycles, maybe an indication that the market perception is shifting—one that is finally pricing strength and not weakness. On top of that, the figures appear to be detecting stabilizing wages and lower churn rates that are potentially serving to anchor sentiments while broader macro uncertainties persist, particularly around the issue of tariffs and policy uncertainty.
On the value on equity front, this situation fulfills the thesis of undervalued staffing and HR services companies that underperformed on overly pessimistic labour market forecasts. If consumers are to continue to soften expectations, we expect investor rotation into these shares with forward hiring momentum gaining traction. Analysts should monitor labour participation rates, temp worker data, and wage inflation metrics through the next couple of months. In Zaye Capital Markets, we see unemployment sentiment not as a lagging noise-but more likely a potential leading indicator of hiring momentum to latter parts of 2025.
Policy Uncertainty Curbs Confidence Irrespective Of High-Spending
Faith of consumers in U.S. economic policy remains muted, according to June 2025 University of Michigan survey results. Persistent disappointment since the year 2000—albeit strengthened this month—underscores broad disappointment with uncertain trade policy and ongoing tariff tensions. Recent judicial blocking of scheduled tariffs last month has done nothing to enhance confidence. While continuing to spend at a high rate, consumers continue to express concern about the direction and persistence of fiscal and trade policy. At Zaye Capital Markets, we see this not as a sign of partisanship but a natural market response to persistent policy uncertainty.
Tariff uncertainty, particularly with the European Union and Canada, has put additional pressure on international supply chains just at a time that companies were beginning to manage inventories and cross-border sourcing. Deloitte’s March 2025 outlook was correct to circumscribe trade uncertainty to be a dampener on economic momentum amidst ongoing consumer spending. Anxieties are less about near-term inflation and more about the problem of longer-term uncertainty—how long the margins will persist and whether policy uncertainty will ultimately erode jobs or investment. Confidence indicators ratify this concern with longer-term surveys registering less optimism where policy is uncertain. Here undervaluation is forming within diversified, internationally spread freight companies with little tariff exposure. These companies, underappreciated on account of macro negativity, stand to benefit if trade flows normalize or visibility on tariff talks increases. Import/export volume, inventory turn ratios, and U.S. trade officials’ statements within the next few weeks are what to watch, according to analysts. Zaye Capital Markets’ thesis is that confidence is not going to really turn until policy consistency is improved—and that’s opportunity available to those ahead of the narrative inflection point.
Workforce Confidence Plummets In The Face Of Policy And Tech Shocks
The record low reading of the Glassdoor Employee Confidence Index of 44.11% in May 2025, amidst escalating concern within the American workforce—a precipitous fall compared to its 55.5% earlier in 2022—partially is the consequence of economic policy uncertainty, as captured using the proposals of tariffs put forward in April. But this also reflects a fundamental concern about disruptions on a structural basis. We at Zaye Capital Markets don’t see this as a reaction to trade tension but as a convergence of geopolitical risk and fundamental technological disruption that have together reshaped employee expectations and job security.
American Psychological Association polls indicate nearly every other employee now has more job insecurity with rapid policy shifts—a trend underscored by the increase of automation and AI. Brookings Institution’s 2023 paper detailed how chat-based technologies like ChatGPT accelerated the disappearance of supportive jobs and exacerbated the gap between work statistics and workers’ reported sense of job security. Coupled with the persistent uncertainty of tariffs, most prominently that endangering supply chains, this is a stressor on a twofold front: outside economic disturbance and inside labor reconfiguration. March’s drop in the University of Michigan confidence measure verifies that workers’ and consumers’ underlying moods are worsening. Investment-wise, this multi-dimensional background is financially promising in undervalued technology enablers of labour adaptability—namely reskilling-enabled software platforms, blended labour models, and B2B human resource solutions. They were undervalued by blanket technology sector conservatism but are positioned to deliver long-term relevance. Analysts will be monitoring recruitment trends, corporate training expenditures, and quarterly surveys of sentiment for indicators of stabilisation. In Zaye Capital Markets’ view, labour market mood is now a pivotal macro factor—not a lagging factor, but a precursor of labour adaptability and earnings resilience.
Fragile Sentiment Masks Deeper Demand Hesitation
Consumer confidence on major purchases, including cars, homes, and durables, was slightly better in June 2025, increasing 15.9% month-to-month to a mark of 60.5. These gains should unfortunately come with some skepticism, however: purchase conditions indicators remain at record lows, the result of a still-anxious households sector struggling with ongoing inflationary pressures and affordability. In Zaye Capital Markets’ view, this pick-up is technically meaningful but not quite that structurally sound, based more on short-term relief than on shifting confidence levels.
Historical precedent cautions against reading too much into this pickup. This type of sentimental optimism was experienced within the 1980 stagflationary cycle—momentary turnarounds that dissipated without any visible solution to inflation. With year-over-year CPI at 3.3% through the end of May, real income growth is still compressed and access to credit is still tightening. Consumers may be relatively positive, but underlying behavior—postponed purchases, higher savings rates, and borrowing less—still suggests that inflation fatigue is the retail landscape’s prevailing characteristic. This increase in optimism, pleasant as it is, does not yet signal a change within discretionary spend momentum.
For shareholders, this dislocation reinforces the thesis favoring undervalued consumer basics and discount retail categories, where earnings visibility is higher and pricing power is less exposed to macro volatility. Personal consumption expenditure trends, motor loan delinquency, and housing affordability indicators should be observed closely by market strategists. In Zaye Capital Markets’ view, unless a policy change is made to provide a price anchor, the recent turn in sentiment is ultimately going to turn out to be a false dawn for growth driven by consumers.
Listing Surge Points To Shift In Housing Dynamics
Active U.S. listings rose 13.9% year-over-year to June 2025, a potential inflection point within the housing market. Inventory is at 1.14 million, well above the 2019 floor of ~900,000 homes, according to Redfin. End to post-2022 stagnation trend means alleviating rate pressures are beginning to free a bottlenecked market, with sellers who were otherwise discouraged by costly financing now coming to market. At Zaye Capital Markets, we see this to be the initial stages of a rebalancing, with inventory gains beginning to erode sellers’ pricing power.
Inventory accumulation has tracked decreasing seller leverage levels historically closely. Evidence of this was confirmed once again in the 2023 National Association of Realtors study, as increasing listings have led to price normalization and increased days on market. As mortgage rates doubled from 2021 to 2023 are now finally beginning to moderate, home owners are finally taking advantage of pent-up demand. This increase in inventory also disproves long-held myths of structural shortage, implying a more elastic supply curve than has been presumed, at least for the sunbelt and suburban submarkets.
Here, undervaluation potential lies with domestic homebuilders with lean debt levels and favorable positions on the ground, particularly those selling to mid-range and entry customers. Whether this listing rise proves sustainable will be a function that will have to be monitored by monitoring mortgage application activity, pricing takeup within high-listing metro areas, and supply-to-sale ratios. In the view of Zaye Capital Markets, we believe that the market is turning to a new chapter—not one of shortage, but recalibration—offering select opportunity within housing-linked equities that were sized previously for extended stagnation.
Rate-Driven Housing Pain Deepens Demand Pressure
The precipitous decline in U.S. homebuying confidence, as indicated by June 2025 University of Michigan results, does much to underscore a cross-current to the housing market. On the chart derived from ZC’s work, housing confidence has fallen 40% since 2022—the same kind of psychological wipeout that characterized the housing peak of the 2008 crash. But this time, instead of the underlying runaway mortgage excesses that drove that, the decline is preceded this time by stratospherically high borrowing expenses, with average mortgage levels at 6–7%, according to recent Federal Reserve statistics. In Zaye Capital Markets’ view, this is a demand-suppression driven by rates, not a problem in credit.
This spread is critical. National Bureau of Economic Research studies in 2023 indicate that one percentage point increases lowered homebuying intentions by a whopping 15%. Borrowing prices today double those at the start of 2021, home buyers are frozen not so much by price inflation per se but by falling affordability through higher cost of borrowing. This is still constraining volumes in the presence of a rise in active listings, evident through more broad real estate statistics. Momentum of demand, rather than shortage of supply, is now the prevailing headwind.
At an equity level, we see nascent signs of undervaluation within rate-sensitive segments like home improvement retailers and modular home manufacturers that are oversold in spite of long-term demographic demand tailwinds. Mortgage application trends, wage growth momentum, and rate-cut expectations into Q4 are metrics analysts need to monitor. We at Zaye Capital Markets still hold the view that until affordability metrics demonstrate material improvement, the housing market will remain subdued—inventory levels and headline price movements notwithstanding.
Tariff Worries Persist Beyond Deflation
Consumer confidence in high-ticket home durables has soured to date so far in 2025, according to University of Michigan survey statistics tracked in new research. While headline inflation has declined to a modest 1.2%, a gulf is opening between improving macro numbers and public perception. In Zaye Capital Markets’ view, this disparity reflects unresolved tariff uncertainty, not price levels per se. While official readings of inflation print moderations, consumers are still cautious-habituated and expecting downstream cost vulnerability.
This is supported by empirical work done by the National Bureau of Economic Research that holds that tariffs have transmitted about 90% of their expense to the final consumers within six months. These effects tend to be asymmetrical, worked on by demand elasticity and movement of the exchange rate, according to recent market studies. “Normalization of inflation” commentary today does not account for chronic uncertainty about the stability of trade policy—part of recent experience. A classic that jumps to mind is the argerious 2018–2019 U.S.-China trade war, whereby nearly complete transmission of tariff cost to consumer prices was observed even with constrained overall price pressures.
This cautionary view holds that value now belongs to some select durable goods companies with vertically-integrated value chains and diversified framework of sources. These companies have the ability to isolate margins and moderate the effects of tariffs—efforts the market might be grossly underpricing. Movement of the exchange rate, mix of product type on consumer confidence, and any new trade policy announcements are among aspects that readers should be watching. In Zaye Capital Markets’ view, public opinion will more likely dictate behavior, and deviations with numbers will more likely convey—not distort—what is yet to be priced fully out of the market.
Demand Tapers Off As Buyers Delay Commitment
Redfin’s Homebuyers’ Demand Index was down 3% year-over-year in early June, 2025, a market with contained optimism following a recent stabilisation. That compares with a year-over-year rise of 20% in the Mortgage Bankers Association’s applications, a spread between intention and following through on transactions. In Zaye Capital Markets’ view, the spread is not a function of pent-up demand, but rather a behavioral response to affordability pressures, with buyers holding off until economic certainty—particularly on rates—appears.
The predictions of the 2024 U.S. News Housing Market Index confirm this direction, with home loan interest rates to remain above 6% through the initial years of 2026 on account of built-in expectations of inflation. These higher levels of lending have cooled down the sense of urgency on the purchaser’s end, with many households preferring to wait and see conditions improve. Meanwhile, appreciation of prices is also expected to slow down until 2029, diminishing the impetus to make a speedy purchase. In high-demand states too, affordability ceilings are generating more tactical, rather than speculative, purchases—pointing to a multi-year slowdown of housing velocity.
Investor attention should now turn to undervalued property technology companies and area builders that serve relocate-to markets. Redfin, for instance, found that Los Angeles homebuyers at the beginning of 2025 were looking to escape the city at a rate of 23%, a trend that is supportive of rising cost migration and city flight. Population migration trends, builder sentiment about second-tier cities, and rate expectations should be monitored in forthcoming Fed communications. According to Zaye Capital Markets, this disparity between mortgage activity and underlying demand is the result of a structurally altered buying psyche—less impulse-driven, more cautious, and highly rate-sensitized.
Layoff Wave Indicates Structural Reordering, Not Cyclical Downturn
Announcements of U.S. lay-offs rose 79% year-on-year through the first five months of 2025, to 695,859 versus 388,589, according to Challenger, Gray & Christmas and Arbor Data Science. While headline growth of GDP remains at a steady 2.1% in Q1 2025, this increase reflects more of a structural change behind the scenes rather than a standard cyclical downturn. In our estimation at Zaye Capital Markets, such a divergence is the mark of a “silent recession”—a reshuffling of the labor market imperceptible to standard macro trends but felt sharply in mid-income and repetitive-commerce jobs.
A 2023 working paper of the National Bureau of Economic Research found that labour demand goes down by 2–4 per cent with the adoption of AI, potentially explaining the skewed job losses. Business is restructuring numbers not due to collapsing demand, but through restructuring enabled by machines. That is a fundamental shift within work dynamics where work force growth is getting decoupled from productivity growth. With the adoption of AI within functions involving back-office work, logistics, and customer service, traditional jobs indicators won’t necessarily capture economic stress.
Against this backdrop, undervaluation bets are emerging among human capital management companies and upskilling platforms with AI-enabled initiatives. These firms will be supported by the transition economy with more segments of labour facing headwinds. Sector concentration of lay-offs, labour wages versus productivity disparities, and trends in corporate adoption of AI must be tracked on the earnings calls. This transition within labour is not short-term noise in the view of Zaye Capital Markets—it’s a macro signal of what value creation, labour utilization, and economic pain now look like within the age of AI.
Domestic Stress Evidenced By Manufacturing Decline Amidst World Stability
The June 17–20, 2025, Bloomberg economic calendar, issued recently in a chart, indicates new weakness in U.S. regional factory activity, with the NY Empire State Manufacturing Index falling to -9.2 in May. This is the third consecutive month of contraction and indicates a deteriorating industrial atmosphere. Consensus expected stability, but the decline is a signal of more serious supply-demand distortions. We view this index at Zaye Capital Markets to be a leading indicator. As has been confirmed by the National Bureau of Economic Research’s study of 2023, persistent declines in factory pessimism tend to anticipate more general slowdowns in employment, business investment, and consumer confidence.
Retail and housing starts take center stage on the calendar, both segments treading a fine line today between stagnation and resilience. Disagreement on the forecast, i.e., May Retail Sales Ex Auto -0.3% vs. modest +0.1%, reflects mercurial consumer behavior in the face of persistent borrowing costs and tariff-driven input price inflation. These pressures aren’t getting translated abroad. In fact, World Bank statistics through 2024 are featuring stable recovery on world supply chains—underperformance of the U.S. is increasingly domestic in origin. That would mean that structural cost pressures and policy uncertainty might be creating U.S.-sensitive headwinds to the consumer economy. On the other hand, undervaluation is developing within lean, technology-enabled business-to-business manufacturing companies with high export orientation and low domestic cost exposure. These companies are stuck at a discount to their international comparables on misallocated macro drag. Factory orders, inventories, and margin squeeze on capital goods makers are the things to track. Industrial sentiment is more than a local reading to us at Zaye Capital Markets—it is now a leading indicator to domestic economic exposure with broad ripple effects.
SHARP MANUFACTURING REVERSAL VS. TECH-LED MARKET OPTIMISM
June 2025 Empire State Manufacturing Index dropped sharply to -16, below -6.3 anticipated and reversing the last month’s temporary pop. Federal Reserve Bank of New York survey data showed new orders collapsed to -14.2 from a +7, an abrupt stop in statewide demand. At Zaye Capital Markets, we consider this abrupt reversal as more than local weakness—it serves to underscore the tenuous nature of U.S. manufacturing sentiment in a high-rate, policy-unpredictable environment where forward bookings are weakening under uncertain trade.
Notably, this deceleration of manufacturing is the reverse of surging equity markets continuing to rise on expectations of long-term technology. A SimScale document of 2025 outlines the way simulation technology and artificial intelligence are transforming industrial processes to increase efficiency against soft short-term demand. Such decoupling would mean investors discounting the volatility of the cycle and instead opting for the power of structural innovation—betting on productivity increases to replace old-economy order book or input price shortcomings. Markets perhaps now are factoring in a period of digital productivity, rather than relying on old-economy metrics alone.
Investment-wise, undervaluation might be found to be present within high-end industrial companies utilizing digital twins and automated platforms on their payrolls—names unfairly bracketed with their older cyclical cousins. Analysts also have to monitor sub-indices on jobs, which rose to +4.7 from -5.1, a note that labor market trends sometimes contradict broader sentiment indicators. In Zaye Capital Markets’ view, the fall of the Empire Index is dire, but its macro effect has to be considered within the backdrop of technology evolution, not industrial belt-puckering.
Upcoming Economic Events
Core Retail Sales month-over-month, Retail Sales month-over-month, Existing Home Sales, Flash Manufacturing PMI
As we enter a high-density era of data, market participants will have hawk-like eyes on U.S. levels of consumption—Core Retail Sales m/m and Retail Sales m/m—which give high-frequency coverage on the health of consumers. Chronic rate pressures and geopolitical uncertainty mean that these numbers will be at the forefront of assessing the vigor of spend trends and whether recession worries are overstated or undervalued. Existing Home Sales and Flash Manufacturing PMI will make smaller contributions to a broad economic story, but once more, it is about the consumer who is front and centre in the macro story. At Zaye Capital Markets, we eagerly wait to see if strength continues—or economic fatigue is setting in.
Core retail sales month-over-month.
This figure, excluding autos, gives a purer view of underlying consumer behavior free from high-ticket volatility.
- If the Core Retail Sales is higher-than-expected, we’d expect a bullish market response—particularly at high-beta discretionary names such as apparel, electronics, and e-retailing, where investors are eager to be affirmed of strength. A beat would also validate the Fed’s thesis that rate hikes have not broken the back of U.S. consumption, potentially lowering the pressure on near-term rate-cut expectations and sending yields modestly higher.
- If the number is lower-than-expected, this could signal that consumers are pulling back on spend fueled by rate fatigue, credit restraint, and price sensitivity. In this case, we’d likely experience selling pressure on retail names with rotation potential to defensive segments such as utilities, staples, and healthcare.
Retail Sales month-to-month
The broader measure of retail sales, including cars, provides the broad view on household spend.
- A better-than-projects reading has the potential to unleash a short-term risk rally, suggesting the U.S. economy has some life left in it yet—despite policy headwinds and inflation. Markets would favor transport, travel, and consumer finance sectors, with cyclical shares gaining on the pick-up in demand.
- A weaker-than-projects reading would suggest high borrowing costs and trade-spill tariffs are starting to bite more than expected. It would likely take rate-cut expectations into Q4, reduce bond yields, and see the U.S. dollar soften. In equities, it would spark revived demand for high-yielding dividends and real assets as investors gear up for a consumption slowdown.
We take this week’s retail numbers at Zaye Capital Markets to be a turning point—not just to gauge Q2 momentum, but to gauge whether consumers are just catching their breath, or retrenching. An equity, bond, and currency market reaction will yield a telling indication of where confidence is at, and whether a theme of consumption is able to further support the second-half rebound of the U.S. economy in 2025.
Stock Market Performance
Indexes Bounce Back Well from April Low Points, but Broader Drawdowns Remain Prevalent
US equities have rallied sharply off April 8th lows, but underlying market softness is a challenge to the rally’s sustainability. Headline index action is positive but the average member drawdown suggests underlying softness—most acute on smaller capitalization and technology-laden benchmarks.
Below is a detailed summary of key indexes:
S&P 500: Stable Growth with Tight Margins
S&P 500: +2% YTD | +20% since Apr low | -19% off YTD high | Average member: -23%
The S&P 500 is only up a paltry +2% year-to-date, solely a result of a +20% recovery since this April’s lows. But the index is still -19% off its year-to-date peak, and the average component lags -23%, a sign that results are not widely spread but instead fueled by a select group of mega-caps.
NASDAQ: Tech-Led Growth, but Scars Persist
NASDAQ: 0% YTD | +27% since Apr. low | -24% off YTD high | Avg. member: -44%
The NASDAQ has been powered by mega cap technology and artificial intelligence, advancing only +27% since its April low last year. It is still, however, down year-to-date, and its -44% average member decline is the weakest of the indexes—implying underlying weakness under this technology-driven rally.
Russell 2000: Small caps rebound, but recovery is slower.
Russell 2000: -6% YTD | +19% since Apr. low | -24% off YTD high | Avg. member: -37% The smaller caps still trail the broader market. Though having gained +19% since its low last April, the Russell 2000 is -6% YTD. That -24% decline since its highs and -37% average member performance indicate that the risk on smaller-cap names remains cautious.
Dow Jones: Defensive bias curbs losses
Dow Jones: -1% YTD | +12% since Apr low | -16% off YTD high | Avg. member: -23% Dow Jones also remains very resilient, down just -1% on the year with a +12% recovery since April. That -16% decline from YTD peak and -23% average member drawdown indicate that even though defensive stocks have minimal downside, the blue-chip index is not exempted from macro pressures. We at Zaye Capital Markets believe that such divergences highlight the need for tactical sector positioning and a focus on quality again among equities with market breadth lagging behind headline advances.
The Strongest Sector In All These Indices
Energy and Industrials Lead While Consumer Discretionary Slides Behind
Amidst a decelerating market recovery, leadership within the S&P 500 has decisively shifted toward cyclical and industrial names against more conventional growth areas. Up to June 13, 2025, the differential between year-to-date (YTD) and month-to-date (MTD) performance reflects shifting investor focus—from momentum-driven technology to hard economic exposures such as energy, manufacturing, and defence.
Energy: The Unchallenged Leader in Monthly Momentum
YTD: +2.2% | MTD: +8.0%
Energy is leading all groups on a month-to-date basis with a +8.0% rise fueled by higher prices on Middle Eastern tensions and revived inflation hedging. Despite its relatively modest +2.2% year-to-date performance, the group’s recent leadership suggests investors are rotating into commodities amidst macro uncertainty.
🏗 Industrials: Best Performer Year-to-Date
YTD: +8.0% | MTD: -0.2%
The industrials are leading with the best YTD performance of +8.0%, with aerospace, construction, and infrastructure sub-sectors gaining on the back of robust demand. Though flat to June year-to-date (-0.2%), the group is a top choice among those looking to invest with real economy exposure with AI optimism facing tangible execution hurdles.
Consumer Discretionary: Deep in the Red
YTD: -6.7% | MTD: -0.6% Discretionary is the laggard on a YTD and month-to-date basis, -6.7% YTD and -0.6% last month. This is a function of persistent headwinds of increasing rates, slow real wage growth, and cautious consumer behavior—despite broad market rallies. We at Zaye Capital Markets are of the view that the Energy and Industrials outperformance is a more fundamental market rotation—less speculative and more driven by cash flows, price power, and macro resilience. Intra-sector dispersion is very high, and tactical positioning is critical to navigate the second half of 2025.
Earnings
June 16, 2025 Yesterday’s Earenings Recap
- Lennar Corporation (L
Lennar reported Q2 revenues of $8.38 billion, beating $8.16 billion expectations, on the strength of delivery of 20,131 homes against last year’s 19,690. But EPS fell to $1.81 (down $3.45 YoY) short of expectations at $1.94. Gross margin was stable at ~18%, though average selling price fell on account of pricing pressure. Drivers: volume strength underpinned by buyer incentives (rate buydowns, price reductions), pressure on margins on account of reduced prices, and cautious consumers on account of high mortgage rates.
- Powerfleet, Inc.
PowerFleet posted $362.5 million in FY2025 revenues (+26% YoY), of which about 75% came from Q4 revenue was $103.6 million, albeit with a $0.09 per share loss (compared to $‑0.02 expected EPS). The stock gained ~12% pre-market following accelerating growth in sales. Investors should note the trade-off: high-subscription growth and operating leverage vs. ongoing profit drag.
- Digital Turbine, Inc.
Q4 Digital Turbine revenues were $119.2 million (+6% YoY); fiscal year revenues were $490.5 million. Net loss on a GAAP basis improved to $18.8 million ($‑0.18/share), as non‑GAAP EBITDA rose 66% YoY. Stock went higher on the beats on both revenues and EPS. Points to watch: margin expansion, scalable platform drivers, and path to sustainable profitability.
Today’s Earnings (June 17, 2025)
- Jabil Inc.
Reporting ahead of the market, forecasters expect revenues of about $7.10 billion (+4% year-over-year) and $2.30-2.31 per share. In focus: strength of the AI and data-center exposure, gross margin performance of the back-end manufacturing, and normalization of inventory. Guidance beats would contribute to positive sentiment on technology-driven industrials.
- John Wiley & Sons, Inc. (WLY)
Anticipated to post $1.27 (+5% YoY) on revenues of $435 million (‑7.1% YoY) before market. Seek guidance on education vs. research publishing segments and subscription vs. advertising-based revenues. Consider tracking margin resilience against digital transition challenges.
- La-Z-Boy Incorporated
Reporting Q4 results today, expectations are $0.93–$0.98 adjusted EPS and $557 yui Drivers will include trends in housing affordability, home furnishing demand, and cost of the supply chain, and U.S. consumers’ spend. With softer retail demand, direction will be required.
- Tsakos Energy Navigation Ltd (TEN)
Consensus is expecting pre-market revenues of about $154 million (‑3–24% YoY?) and about $0.38–0.40 (‑68–75% YoY) of EPS. Investors are looking at tanker rate trends, contracted backlog, and profitability relative to shipping volatility. Commentary on liquidity and debt management would also be material to sentiment.
Bottom line: Resiliency of volume business was the message yesterday’s reports delivered—but pressure on the margin lingered. Today’s reports will challenge whether worldwide growth (“Jabil”), pricing power (“Wiley,” “La-Z-Boy”), and cycle pressure (“Tsakos”) are tracking macro signals. Look for commentary on earnings quality and forward guidance.
Stock Market Summary – Tuesday, June 17, 2025
Despite Markets opened on Tuesday on a hesitant note with investors weighing softer-than-anticipated retail sales figures, new geopolitical tensions, and comments from President Trump. Trump’s re-emphasized focus on tax reform and energy independence added volatility to a highly vulnerable macro climate. May’s relatively light retail sales disappointment indicated a decline of consumer momentum, with the Federal Reserve’s neutral bias still intact but with a question mark against the longevity of the U.S. recovery.
Despite contrary mood, trading remains active and rotation continues to be seen across sectors. High rates, policy uncertainty, and innovation driven by artificial intelligence remain the common market theme, with investors becoming increasingly selective on stock and sector exposure.
Stock Prices
Economic Indicators and Geopolitical Events
Core Retail Sales also were flat last month, short of the 0.2% increase that was expected, and headline Retail Sales prints were also soft. That suggests that while price inflation is decelerating quietly, so too is consumer spending—putting the Fed on a delicate balancing act. Geopolitical tensions also restarted in the Taiwan Strait, triggering modest softness in Asia-exposed equities and semi-conductor shares.
President Trump’s remarks on energy policy and tax reform fueled speculative bets on energy and industrial stocks, but further direction is likely to come. In the meantime, the dollar was flat and bond yields edged down modestly on tempered demand readings.
The Magnificent Seven and the S&P 500
The “Magnificent Seven” all saw broad selling pressure, with Nvidia and Tesla declining more than 2% on fears of potential U.S. export bans. Apple and Microsoft also declined with investors getting cautious ahead of Q2 earnings season. This pullback has surpassed the momentum within the S&P 500, with the strength now shifting to energy, utilities, and some industrials. Mega-cap fatigue is beginning to be felt, with increasing breadth but smaller aggregate increases.
Big Movers – June 16th, 2025
Despite geopolitical tensions and poor macro numbers, growth shares and speculative shares staged a comeback on Monday with a search for risk within some segments.
The top gainers were:
- Arqit Quantum (ARQQ) +22%
- Eos Energy (EOSE) +14%
- Nano Nuclear (NNE) +13
- NuScale Power (SMR) +10%
- Ouster Inc. OUST +10
- AMD (AMD) +9
- AST SpaceMobile (ASTS) +8%
- Enovix (ENVX) +7%
- NewBridge Investment (NBIS) +7%
- Intellia Therapeutics (NTLA) +7%
- Coinbase (COIN) +7%
- Robinhood (HOOD) +6%
- Oklo Inc. (OKLO) +6%
- Hims & Hers Health (HIMS) +6%.
- Alarum Technologies (ALAB) +6%
- Palantir Technologies (PLTR) +4%
This rush of activity lends to a feeling that segments of the market—nuclear, AI, space technology, and finance technology—aren’t just increasing but are increasing regardless of broad economic or geopolitical cues. How one investor described this was just: “the future clearly doesn’t care about geopolitics right now.”
Key Index performance on June 17, 2025
- S&P 500: Trading at 5,912.80, down 0.2% intraday.
- Nasdaq Composite: down 0.5% at 13,690.40 with technology still under pressure.
- Dow Jones Industrial Average: A narrow increase at 38,672.40, increasing 0.1% on the strength of energy.
- Russell 2000: Down 0.4% at 2,084.20, a reflection of small-cap susceptibility to consumer spending fears.
The farther into June that we get, the more closely investors will watch macro numbers and earnings guidance, but more so, housing and factory numbers. With policy risk intersecting with themes of AI, the way forward remains complex—and entirely opportunity-laden for those who navigate the volatility.
Gold Price
Gold is presently trading around $3,396–$3,400 /oz, down from recent highs but still firmly within a tight band amidst the tug of war of rhetoric vs. diminishing economic indicators. Yesterday’s weaker-than-forecasted Retail Sales added to the cautious mood, raising fears that U.S. consumers are getting their belts tightened. Furthermore, Trump’s constant commentary—ranging from slamming the Fed to boasting about economic dominance on his watch—has added volatility and uncertainty to the macro story. His hawkish trade, inflation, and energy independence rhetoric reignited expectations of policy disruption should he come back into power. For gold, this combination of institutional uncertainty, fiscal rhetoric, and mood rise to the surface is supportive, backing its value not only as a hedge against dollar volatility but also potential policy uncertainty.
Today’s Retail Sales and Core Retail Sales m/m prints are important. If numbers are softer than anticipated—as preliminary figures indicated yesterday—markets will be more likely to assume that resilience is faltering among consumers. That would force the Fed to taper additional tightening, capping bond yields and weakening the dollar—supportive of gold. A surprise beat, however, would briefly stem gold’s momentum as risk appetite is re-sparked. But overall market sentiment remains bullish: geopolitical uncertainty, growing distrust of established policy institutions (as articulated in Trump’s comments) and an underlying sense of stagflation fear all make a tailwind configuration for gold. In Zaye Capital Markets’ view, gold remains a strategic hold since volatility, political uncertainty, and economic fragmentation have continued to re-shape market expectations to H2 2025.
Oil Prices
The price of crude has stood at $72/barrel WTI and $73.50/barrel Brent, having rebounded against the last geopolitical uncertainty. Yesterday’s Retail Sales were slightly weaker compared to expectations, dampening mood and raising doubts on near-term growth of demand. Markets, however, are exceedingly sensitive to geopolitical risks—chiefly the Israel–Iran tensions escalating. Donald Trump’s calls to vacate Tehran have raised fears of a broader conflict and potential disruption to the flows of crude through the Strait of Hormuz. This has supported crude prices intra-day with investors hedging against potential supply shock to the world’s energy market.
Looking ahead, the immediate course of action on oil is guided today by today’s Retail Sales m/m and Core Retail Sales announcements. A softer-than-anticipated reading would be supportive of expectations of demand deceleration and caps prices irrespective of geopolitical tensions. A higher-than-anticipated reading on the retail front would prop crude with a more constricted demand forecast. A dovish bias at the next Federal Reserve meeting also hangs over, with the dollar to depreciate–lowering the price of oil to foreign purchasers. In Zaye Capital Markets’ view, we still view oil to be caught within a tug-of-war between geopolitics-influenced supply apprehension and macroeconomy metrics pushing demand expectations.
Bitcoin Prices
Bitcoin is trading at around $107,606 at present, having gained nearly 1.4% intra-day, with intra-day highs of around $108,801 on the back of a re-emerging bullish momentum. This is combined with underlying institutional backing—Coinbase is reporting steady transactional volume, and BlackRock’s IBIT ETF continues to shatter AUM records—along with political rhetoric of Bitcoin as a hedge against inflation and failure of money policy. Tweets against fiat currency and advocating using Bitcoin for donations by Donald Trump, and the use of hashtags such as #TrumpEconomy and concepts such as U.S. strategic reserves of Bitcoin, are also forcing more focus on the asset within the popular lexicon, restoring investor confidence.
Weaker Retail Sales numbers yesterday have added to the macro backdrop behind the appeal of Bitcoin. Poor consumption numbers threaten to make a case against Fed tightening expectations, supporting the narrative of Bitcoin as “digital gold” and store of value proxy. If today’s Retail Sales and Core Retail prints are also poor, this will again soften the dollar and create additional flows into Bitcoin as investors reprice expected returns and diversify portfolio positions. In our view at Zaye Capital Markets, the current framework behind Bitcoin—fueled by institutional funds, political acceptance, and macro dissidence—positions bitcoin to remain resilient relative to broader market volatility.
ETH Prices
Ethereum is hovering around $2,600, trading firm near the upper end of its recent range amid a sudden surge in institutional demand and big-wallet buying. Over the past week, ETH spot ETFs have had over $530 million in net inflows, one of the highest ETF weeks for Ethereum since late 2024. On-chain metrics also show that whales and sharks—wallets holding 1,000 to 100,000 ETH—have collectively added nearly 1.49 million ETH, over $3.8 billion. The accumulation trend reflects long-term conviction resuming among institutional players, even as short-term traders and retail flows are relatively neutral.
Even with last week’s short pause on inflows—ending a record-breaking 19-day streak—ETF activity has picked up again, and wallet concentration continues to rise. Accumulation has been particularly high through decentralized exchanges and L2 bridges, indicative of strategic positioning rather than speculative frenzy. If the accumulation continues, ETH has a chance to breach the $2,620 resistance and target the $2,800–$3,000 range. In Zaye Capital Markets’ view, Ethereum is positioning itself for a structural rally, fueled by the convergence of regulated exposure through ETFs and increasing confidence in its long-term network value among high-net-worth investors.
