US markets enter the final week of June facing fresh geopolitical risks after a dramatic weekend strike by American forces on Iranian nuclear sites, an escalation that has rattled global energy markets and sharpened investor focus on oil prices, Fed policy, and economic data.
The Pentagon confirmed that "Operation Midnight Hammer" targeted Iran’s Fordow, Natanz, and Isfahan nuclear facilities using bunker-busting bombs deployed by seven B-2 stealth bombers.
President Donald Trump said in a brief national address that the facilities had been “completely and totally obliterated,” while Defense Secretary Pete Hegseth detailed the operation alongside Joint Chiefs Chair Dan Caine.
Markets initially reacted with caution. Oil prices surged early in Monday’s session but pulled back amid signs that crude continues to flow through the Strait of Hormuz, a key chokepoint for global energy supply.
“The week kicked off with a jump in oil prices as the US got involved in Middle East tensions,” said Swissquote Bank’s Ipek Ozkardeskaya. “Now, the world is holding its breath to see how Iran will respond.”
Iran’s foreign ministry condemned the strikes as “a grave and unprecedented violation” and warned that “all options” are on the table, including a potential closure of the Strait of Hormuz, which handles about 20% of global oil and gas shipments.
“If things get uglier... the price of US crude could spike above the $100pb level,” Ozkardeskaya noted.
Equities showed only a muted response to the weekend’s developments. “It really feels like markets have become increasingly unreactive to the news,” Ozkardeskaya observed. “The lack of reaction is fascinating.”
Tech stocks could find support despite geopolitical jitters, according to Wedbush’s Dan Ives. “The market will view this Iran threat as now gone and that is a positive for growth in the broader Middle East and ultimately the tech sector... We would encourage investors to buy our tech winners and AI Revolution stalwarts such as Nvidia, Palantir, Microsoft, Amazon, Oracle, Tesla on any weakness from geopolitical headlines.”
Packed calendar
Meanwhile, this week’s economic calendar is packed, with Fed Chair Jerome Powell delivering his semi-annual testimony before Congress on Tuesday and Wednesday, though analysts expect few surprises following last week’s FOMC meeting.
“We expect communications this week to mostly reiterate what we heard from Chair Powell last week,” said Deutsche Bank.
Investors will also track an onslaught of US data, including Q1 GDP revisions, durable goods orders, trade figures, and the Fed’s preferred inflation metric — core PCE — due Friday. Deutsche Bank expects Thursday’s final GDP print to remain unchanged at -0.2%, while the core PCE is forecast to rise 0.13% month-over-month, pushing the year-over-year rate up to 2.6%.
Housing data will also come under scrutiny, with existing home sales on Monday, new home sales on Wednesday, and pending home sales Thursday.
In Washington, attention remains fixed on ongoing Senate negotiations over the “One Big Beautiful Bill Act” (OBBBA), which could impact Medicaid, SALT caps, and clean energy tax credits. However, Deutsche Bank does not expect major changes to its projection of 6.5%–7.0% fiscal deficits as a share of GDP over the next three years.
'Wait and see'
While geopolitical risks remain front and center, most analysts agree that markets are still in a wait-and-see mode, with policy responses and retaliation — or lack thereof — likely to determine the next direction for equities, bonds, and commodities.
As Ozkardeskaya summed up, “A sustainable jump in oil prices... could have wider implications for the global economy by boosting inflation and preventing central banks from further easing... Global equities will likely remain under pressure at the open – but judging by how oil prices reacted to the weekend news, the selloff could remain relatively soft compared with the heaviness of the headlines.”
Elsewhere, earnings due this week include FedEx, Carnival Corp, and BlackBerry on Tuesday; Micron on Wednesday; and Nike and Walgreens Boots Alliance on Thursday.