When it rains, it pours. The feeling that a raft of unsettling news is piling up is something that investors have become familiar with these days.
On top of the protests in California, uncertainty about tariffs, back-and-forth trade talks with China, and a horrible plane crash in India, there are new concerns after Israel surprised Iran with strikes on nuclear facilities overnight. It's way too soon to know the implications yet, but it's perfectly understandable to feel nervous.
The human cost of an escalating conflict in the Middle East is deeply tragic. But as an investor, the best advice might be the following: look at what history tells us in terms of the market's perspective.
In fact, last year Bank of America strategists dug into how markets typically react to sudden bouts of geopolitical turmoil. It's almost been forgotten now, but there was a brief flare up between Iran and Israel in April 2024, which was resolved with some largely symbolic retaliations.
BofA found that, if anything, events like that usually prove to be buying opportunities because markets usually recover. It makes sense -- stocks will be quick to drop and oil prices quick to rise precisely because no one can quantify the dangers in the immediate aftermath.
In fact, when Russia invaded Ukraine in February 2022 the stock market recovery played out on the same day as the major indexes reversed early losses to close higher.
The early market reaction this time was typical -- stocks fell, oil prices surged, and haven assets like the dollar and gold gained. Of course, things can always get worse, and the current conflict could still be in its early stages.
But for now, the only thing investors at home can reasonably do is wait and hope the storm clouds pass by fast.
-- Brian Swint
***
Israel Strikes Iran as Middle East Tensions Escalate
Israel launched a series of strikes on Iran's nuclear facilities and military leadership overnight, hitting dozens of targets and killing the head of the Islamic Revolutionary Guard Corps. Israel said Iran launched 100 drones in retaliation.
-- Israeli Prime Minister Benjamin Netanyahu said that the strikes could
last "as many days as it takes" to remove the threat of Iran's nuclear
program. "We struck at the heart of Iran's nuclear enrichment program. We
struck at the heart of Iran's nuclear weaponization program," he said.
The strikes missed some of Iran's biggest nuclear facilities, the
International Atomic Energy Agency said in posts on X.
-- The Trump administration immediately distanced itself from the attack.
"We are not involved in strikes against Iran and our top priority is
protecting American forces in the region," U.S. Secretary of State Marco
Rubio said in a statement.
-- President Donald Trump addressed the strikes in a Truth Social post early
Friday. "Iran must make a deal, before there is nothing left, and save
what was once known as the Iranian Empire. No more death, no more
destruction, JUST DO IT, BEFORE IT IS TOO LATE."
-- Oil prices spiked overnight, with Brent crude futures jumping around 7%
to $74 a barrel. Gold, a traditional haven asset, also jumped to above
$3,440 -- on track for a record settlement high, according to Dow Jones
Market Data.
What's Next: The question is whether, and how quickly, the tensions escalate from here. A full blown war in the Middle East could draw in other nations as well, including the U.S.
-- Brian Swint and Matt Peterson
***
Dollar's Slump Worst Since 1980s as Sell America Trade Advances
The U.S. dollar fell to the lowest level in more than three years on Thursday, extending one of its longest runs of declines on record as the "Sell America" trade by foreign investors gathers pace. It is sliding despite tension in the Mideast and modest progress in trade talks with China.
-- The U.S. dollar index, which tracks the currency against six peers, hit
an intraday low of 97.60 on Thursday, the lowest since March 2022. It is
on pace for its worst first-half performance in four decades, while the
euro hit its highest levels since October 2021.
-- President Donald Trump threatened to impose unilateral tariffs on goods
from other countries within weeks if new agreements aren't reached by
July 9, the day his pause on the so-called reciprocal levies expires.
That seemingly contradicts Treasury Secretary Scott Bessent's comment
that the pause on those tariffs could be extended.
-- Fed data show that foreign holdings of Treasury bonds are down by around
$20 billion since April and have fallen by around 27% over the past four
years. A recent Bank of America report did indicate investors are piling
into dollar-denominated assets outside of the Treasury market.
-- George Vessey, lead foreign-exchange and macro strategist at Convera,
said the markets remain on edge while everyone waits for clarity on where
tariffs will settle. Chris Turner, ING's global head of markets, expects
negative factors will keep the dollar "under pressure for the rest of the
year."
What's Next: Trump said on Thursday that he might raise tariffs on auto imports further to spur domestic auto manufacturing. He already set them at 25%. He made the comments during a signing ceremony for legislation to end California's rule banning the sale of new gas-powered cars starting in 2035.
-- Martin Baccardax and Janet H. Cho
***
Immigration Raids Cripple Meat Factory, Empty Building Sites
American businesses that rely on immigrant labor are already absorbing the brunt of stepped-up raids under the Trump administration's sweep through worksites, farms, and factories. With a goal of 3,000 arrests a day, Immigration and Customs Enforcement's moves have left some construction sites deserted, crops unpicked, and employers scrambling.
-- An Elkhorn, Neb., construction site that typically employs dozens of
workers has been a "ghost town" since Monday, Juan Alvarado from the
North Central States Regional Council of Carpenters told Barron's. Most
skilled union members are legal migrants, but enforcement efforts have
affected both documented and undocumented workers.
-- Glenn Valley Foods is running with 30% of its normal head-count after an
ICE raid at its facility in Omaha on Tuesday. Output had crashed to 20%
of capacity, the company's president, Chad Hartmann, told Reuters. The
company supplies pork, steak, chicken, and corned beef to restaurants and
grocers.
-- Foreign-born workers, including undocumented immigrants, have become an
integral part of the U.S. workforce, accounting for 19.2% of workers in
2024, up from 11% in the late 1990s, according to data from the Bureau of
Labor Statistics. ICE told Barron's worksite enforcement is a priority.
-- About 70% of employers expect increased immigration enforcement to affect
their workplaces in the next 12 months, according to the 2025 Littler
Annual Employer Survey Report. Agriculture, food processing, construction,
and services such as hotels and resorts, could be strained for labor.
What's Next: President Trump acknowledged the labor challenges for some of these employers, calling out farmers and those in the hotel and leisure business. He promised to protect farmers and said change would be coming, without elaborating. The White House told Barron's there was no shortage of American hands for the labor force.
-- Sabrina Escobar, Evie Liu, Megan Leonhardt, Shaina Mishkin, and Mariapaula Gonzalez
***
Musk's X Has a Reality Show. Investors Must Do Their Own Vetting.
The final episode of X's reality TV show Going Public, part of Elon Musk's social media company's goal to shake up traditional financial media, airs today. The show introduces start-ups and offers viewers a chance to invest in them, but investors must do their own vetting.
-- Darren Marble, co-creator of Going Public, has described his show as
"Shark Tank meets Apprentice," with a real-time "Click-to-Invest" button.
During today's finale, viewers can buy stakes in the start-ups portrayed
this season through crowdfunding provisions enabled by the 2012
legislation known as the Jobs Act.
-- The founders of one featured start-up -- Dutch Mendenhall and Amy Vaughn
-- have been under investigation by state and federal regulators,
Barron's has learned. Some investors in their previous venture, RAD
Diversified REIT, say it cost them their life savings. Mendenhall and
Vaughn didn't reply to Barron's questions.
-- Some investors and former RAD employees say they've been interviewed by
Securities and Exchange Commission investigators about its practices. An
SEC spokesperson declined to confirm a possible investigation. Florida's
Office of Financial Regulation is also investigating RAD. Multiple former
employees say they're owed wages and severance.
-- Going Public receives financial compensation for promoting the start-ups
on the show, according to a disclaimer. Other featured start-ups this
season are a cashew-based beverage company co-founded by celebrity
videogamer Tyler "Ninja" Blevins and a business-software maker.
What's Next: Spotlighting start-ups could invite new scrutiny for X, which has faced allegations of misinformation and has seen several missteps in its push to build a viable original-content business to attract new audiences and win back advertisers. For more on this read here.
-- Jacob Adelman and Janet H. Cho
***
Here Are the Contenders to Succeed Powell As Fed Chair
President Trump appears ready to rewrite the playbook for appointing the Federal Reserve leader. He says he is close to naming a successor to current Chair Jerome Powell, whose term doesn't end until May 2026 and who could still remain on the Fed board until January 2028.
-- Trump has been openly critical of Powell for failing to cut interest
rates despite mild inflation numbers. On Thursday, Trump again attacked
Powell, calling him a "numbskull" in rambling comments from the White
House, but said he wouldn't fire him. He also said he may "force
something" at the Fed, but didn't explain.
-- Kevin Warsh is widely seen as a front-runner to be the next Fed chair.
He's a former Fed governor and has Trump's ear. But he's also known for
his hawkish policy stance and desire to limit the scope of the Fed's
activities. Trump is more likely to prefer someone that has dovish policy
leanings.
-- Treasury Secretary Bessent has also recently surfaced as a potential
successor. His insider status could appeal to business leaders hungry for
stability. But the switch from Treasury to Fed chair could appear
opportunistic, risking internal friction and intensifying Senate scrutiny
over concerns about Fed independence.
-- National Economic Council director Kevin Hassett and Fed Gov. Christopher
Waller are also contenders. Both were appointed to their roles by Trump.
Waller would lend technical credibility and institutional stability and
is the second-most dovish Fed official, according to Deutsche Bank
analysis.
What's Next: Predicting a Trump appointee is always difficult. His decisions often appear capricious, driven by personal instincts and shifting political considerations. While Warsh, Bessent, Hassett, and Waller lead the race today, the choice he ultimately makes could defy expectations.
-- Nicole Goodkind and Liz Moyer
***
Do you remember this week's news? Take our quiz below to test your knowledge. Tell us how you did in an email to thebarronsdaily@barrons.com.
1. Unemployment among recent and new college grads is close to 6%, which is higher than the national average -- currently at 4.2% for the first time since when, according to Oxford Economics?
a. 2001 b. 1990 c. 1980 d. 1977
2. Warner Bros. Discovery is splitting its cable operations from its movie studio and streaming businesses, the latest big media company to make that move amid dwindling cable television audiences. Ten years ago, there were an estimated 100 million cable subscribers. That's down to how much now?
a. 60 million b. 70 million c. 80 million d. 90 million
3. Tariffs could take their toll on economic growth, according to new estimates by the World Bank. U.S. economic growth is expected to be shaved by how much this year because of the Trump administration's tariffs?
a. One quarter b. Half c. Three quarters d. None of the above
4. As Tesla gears up for its robotaxi rollout, Goldman Sachs analyst Mark Delaney projects that the North American self-driving ride-hailing market will grow from annual revenue of less than $500 million in 2025 to how much by the end of the decade?
a. $5 billion b. $7 billion c. $9 billion d. $11 billion
5. International Business Machines revealed plans to build the world's first large-scale, fault-tolerant quantum supercomputer called Quantum Starling, for rollout sometime when?
a. 2026 b. 2027 c. 2028 d. 2029
Answers: 1( c); 2( a); 3( b); 4( b); 5( d)
-- Barron's staff
***
-- Newsletter edited by Liz Moyer, Rupert Steiner
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 13, 2025 06:56 ET (10:56 GMT)
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