Weekly Market Review: 16th June 2025

In the US, equity markets gained last week on the back of positive trade sentiment. The agreement between the US and China on a trade framework lifted markets broadly. The deal is expected to facilitate increased shipments of rare earth minerals from China to the US and could eventually lead to President Trump easing restrictions on semiconductor sales to China. However, Western companies reported last week that Chinese authorities are demanding access to sensitive information in exchange for access to these materials, which could reignite tensions. Markets tumbled on Wednesday and into Thursday as tensions escalated between the US and Iran, with negotiations over Iran’s nuclear programme so far proving fruitless. In corporate news, Oracle agreed to purchase $40bn worth—approximately 400,000 units—of NVIDIA’s high-end chips for use in OpenAI’s new data centre in Abilene, Texas. This facility will be one of the largest in the world upon completion and forms part of the Stargate Project, spearheaded by OpenAI and SoftBank. On the economic front, the World Bank released its Global Economic Prospects Report, in which it revised down its growth forecast for the US to 1.4%, a reduction of 0.9 percentage points from its January projection. This follows a similar downgrade by the OECD, with both institutions citing trade uncertainty as the key factor behind the revision. This report was followed on Wednesday by softer-than-expected inflation data, with the April rate coming in at 2.4%, suggesting that tariffs have yet to significantly impact consumer prices. The Israeli attack on Iran nuclear facilities pulled equities lower on Friday, and for the week, the S&P 500 closed -0.52% lower, while the NASDAQ fell -0.94%

In Europe, equity markets traded lower for the week, as trade and geopolitical uncertainty continued to dominate investor sentiment. While the US and China agreed on a framework to improve their trade relationship, the EU remains less optimistic about striking a similar deal with the US. Rising tensions in the Middle East also contributed to market declines. In corporate developments, US private capital giant Blackstone announced it would invest at least $500bn across the continent over the next decade, aiming to become a major lender to corporates and to fund large-scale infrastructure and private equity projects. NVIDIA revealed plans to build its first artificial intelligence cloud platform for industrial applications in Germany. The platform, which will integrate AI with robotics, is designed for large-scale manufacturers, such as the automotive sector. The company also announced its intentions to construct 20 AI factories across Europe, although no timeline was provided. Elsewhere, the European Central Bank stated that gold has overtaken the euro as the second most important reserve asset held by central banks in 2024. Gold bullion accounted for 20% of global reserves last year, compared to 16% for the euro. The US dollar remains the dominant reserve currency, comprising 46% of total reserves. The Israeli strikes on Iran saw markets fall over 1% on Friday. For the week, the EuroStoxx50 and STOXX 600 indices closed lower, down -2.44% and -1.59%, respectively.

In the UK, the FTSE 100 was flat last week, despite hitting a new record high on Thursday. The index was buoyed by optimism surrounding the US-China trade agreement. Hopes for further interest rate cuts were also lifted by softening labour market data. In corporate news, a consortium led by Rolls-Royce secured support from the UK Government for its bid to produce the country’s first Small Modular Reactor (SMR). The index reversed its Thursday gains however after the Israeli strikes on Iran took place, and ended the week -0.03% lower.