Oil Drops, Stocks Pop: Traders Brush Off Geopolitical Risks

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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Despite the U.S. stepping into the Israel-Iran conflict over the weekend and bombing three nuclear sites, Wall Street opened higher and kept its cool.

Traders were caught off guard by the strikes, especially after Trump’s Friday comments suggested a diplomatic route was still on the table. But with oil prices dropping instead of spiking, the feared “oil shock” never showed up—giving stocks room to climb.

That said, the situation is far from settled. The potential for retaliation is real, and even talk of closing the Strait of Hormuz hasn’t rattled markets—yet.

Midday, the early optimism faded, and the indexes briefly dipped into the red. But the pullback didn’t last. Stocks rebounded sharply, even after Iran launched strikes on U.S. bases in Iraq and Qatar. Traders largely brushed it off as political theater, and the market surged into the close.

Crude oil plunged more than 13% from its morning highs, echoing Wall Street’s “let it go” attitude. Tesla gave the Mag7 a boost with a strong move following the buzz around its Robotaxi launch.

Elsewhere, bond yields dropped early but recovered a bit by the close. The dollar started strong but reversed course, while gold held its gains. Bitcoin, after dipping below $100K over the weekend, bounced back to $103K.

With mixed signals from the Fed and global trade uncertainty still in the air, the market seems to be looking for a new catalyst. 

So, the big question is: What’s going to be the next spark to drive stocks toward new highs?

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ETFs On The Cutline – Updated Through 06/20/2025

Ulli ETFs on the Cutline Contact

Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.

The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (198 vs. 206 current).

Take a peek:

The HV ETF Master Cutline Report

If you are confused by some of the terms we use, don’t panic. I have a helpful Glossary of Terms for you.

If you want to learn more about the Cutline method and how it can make you rich (or at least less poor), read my original post here.

ETF Tracker Newsletter For June 20, 2025

Ulli ETF Tracker Contact

OIL CLIMBS, TECH TUMBLES, AND TENSIONS RISE—NOW WHAT?

[Chart courtesy of MarketWatch.com]

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The markets tried to rally early on, but that bounce didn’t last long. Despite Fed Governor Waller striking an optimistic tone—saying inflation looks tame enough for a possible rate cut at the next meeting—stocks slipped into the red. That’s a much rosier outlook than what Fed Chair Powell offered just last week.

But it wasn’t just the Fed on traders’ minds. The ongoing conflict between Israel and Iran continues to cast a shadow over the markets, with no signs of easing. Trump added to the uncertainty, saying he’ll decide in the next two weeks whether to strike Iran, leaving room for potential negotiations.

With tensions running high, traders seem unsure how to react. And when uncertainty rules, markets tend to drift lower—or just stall out—until something gives.

By the end of the week, the major indexes barely budged. Investors were left juggling geopolitical risks, rising oil prices, and mixed economic signals. The Citi Economic Surprise Index even dropped to levels we haven’t seen since last September.

Big tech didn’t fare well either. Mega-cap names and semiconductors both took a hit. Bond yields bounced around but ended lower, while expectations for rate cuts ticked up slightly.

The dollar had a solid week, clawing back recent losses—but that came at gold’s expense, which slipped from last week’s highs.

Bitcoin also struggled but found support around $102K. Meanwhile, crude oil climbed for the third straight week and is now eyeing its year-to-date highs from January.

So, here’s the big question:

Is this week’s market stumble just a blip—or the start of something bigger?

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Bitcoin, Bonds, And Bulls: All Quiet Before Juneteenth

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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The markets kicked off the day on a high note, rallying ahead of the Fed’s interest rate decision expected later in the session.

After yesterday’s slump, investors seemed ready to shake it off—even as tensions in the Middle East remained murky. The conflict between Israel and Iran has now dragged into its sixth day, with no resolution in sight.

Despite some heated back-and-forth between Iran’s Supreme Leader Khamenei and former President Trump, traders largely brushed off the geopolitical noise and kept their eyes on the Fed. Most expected no change in rates—and that’s exactly what they got.

Fed Chair Powell held rates steady but warned that “a meaningful amount of inflation” is still expected in the coming months. That comment quickly cooled the morning’s bullish momentum, sending the major indexes back to flat by the close.

The early short squeeze fizzled, bond yields dipped, the dollar bounced around before ending slightly higher, and gold slipped but stayed within its recent range.

Oil and bitcoin both saw some intraday action but ultimately closed unchanged—though bitcoin, with rising global liquidity, might already be paving its long-term path.

Markets will be closed tomorrow for Juneteenth, and there won’t be a StatSheet this week. But stay tuned for Friday’s market commentary and Saturday’s “ETFs on the Cutline” report.

With inflation still lurking and geopolitical risks simmering, will the bulls be able to regain their footing next week?

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Stocks Sink, Silver Shines, And All Eyes Turn To The Fed

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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The markets opened in the red today, weighed down by fresh tensions in the Middle East.

Hopes for a ceasefire between Israel and Iran were dashed, as the conflict showed no signs of cooling off—despite earlier reports suggesting otherwise.

Oil prices surged nearly 5%, reversing Monday’s dip that had been sparked by a Wall Street Journal report hinting at Iran’s willingness to negotiate. With the saber-rattling back in full swing, energy markets are on edge again.

Adding to the pressure, retail sales came in weaker than expected. Consumer spending dropped 0.9% in May, missing forecasts of a 0.6% decline.

That’s not a great sign for the economy, especially when paired with other downbeat data: industrial production slipped, and homebuilder confidence hit a 13-year low.

The gap between “hard” and “soft” data is narrowing, and traders took notice—especially in retail, where some of the market’s favorite names took a hit. Meanwhile, the most shorted stocks gave back yesterday’s gains in a hurry.

In other markets, bond yields fell across the board, the dollar had its biggest jump in six weeks, gold stayed flat, and silver popped over 2%. Bitcoin spiked at the open but pulled back, finding support around the $104K mark.

Now, all eyes are on the Fed. Will they surprise Wall Street with a rate cut tomorrow?

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Markets Rebound As Traders Bet On Contained Conflict

Ulli Market Commentary Contact

[Chart courtesy of MarketWatch.com]

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The markets kicked off the week with a strong rebound, fueled by optimism that the Israel-Iran conflict might stay contained and that Friday’s sharp sell-off may have been a bit overdone.

Traders seemed to breathe a little easier after a Wall Street Journal report suggested Iran might be open to renewed negotiations—as long as the U.S. stays out of the fight. The report also hinted that Iran had urged Israel to keep things limited. That said, Iran later denied much of it, so the picture remains murky.

Despite the ongoing conflict—now in its fourth day—Wall Street appears relatively calm, at least for now. Both countries targeted each other’s energy infrastructure today, which could have serious global consequences if things escalate, especially if the Strait of Hormuz (a vital oil shipping route) gets disrupted.

Still, the major indexes clawed back a good chunk of Friday’s losses, with the Nasdaq leading the charge. A short squeeze gave the rally an extra boost, especially for the mega-cap tech names.

In other markets, bond yields ticked up, the dollar slipped after a midday bounce, and Bitcoin surged toward the $109K mark on hopes of easing tensions.

Gold, on the other hand, gave back Friday’s gains—but if the saber-rattling picks up again, you can bet it’ll be back in demand as the go-to safe haven.

So, is this just a temporary relief rally—or the start of something more sustainable?

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