Weekly Market Review: 23rd June 2025

In the US, equity markets traded sideways for much of last week, as fears of escalation in the Middle East were coupled with a Federal Reserve interest rate decision. Markets were unsettled by the increase in hostilities between Israel and Iran, but attention was more focused on the potential role of the US, as intervention could trigger a wider conflict in the region. On Saturday night, the US launched strikes on three key Iranian nuclear facilities, with retaliation from Iran expected. On the economic front, the Federal Reserve’s interest rate decision dominated sentiment. While a rate cut was not expected, comments from Fed Chair Jerome Powell were once again in the spotlight. Powell remains under pressure from the Trump administration to lower interest rates; however, the Fed has consistently adhered to its data-driven approach. The central bank’s overall cautious tone did little to ease market concerns about the strength of the US economy. Despite downgrades to economic growth projections, markets still anticipate just two rate cuts in 2025. In corporate news, Netflix has reached a deal with French TV network TF1 to broadcast linear TV and sports content for the first time on the streaming platform. If successful, the move could lead to further partnerships between traditional broadcasters and Netflix, particularly as TV viewership continues to decline across developed economies and advertising revenues increasingly shift to online platforms such as Netflix and YouTube. Elsewhere, Eli Lilly agreed last week to acquire Verve Therapeutics for $1.3 billion. Verve is a gene-editing start-up focused on developing therapies for high cholesterol. The company has already developed a drug, currently entering clinical trials, aimed at treating genetic forms of high cholesterol as well as early-stage coronary artery disease. The deal follows previous partnerships between Eli Lilly and both cancer biotech firm Scorpion Therapeutics and pain specialist SiteOne Therapeutics. Finally, insurance prices for ships travelling through the Strait of Hormuz have surged by more than 60% since the outbreak of the Israeli–Iranian conflict. For a vessel valued at $100 million, the cost of insurance cover has risen from $125,000 to $200,000. For the week, the S&P 500 and NASDAQ closed lower, down 0.61% and 0.26% respectively.

In Europe, equities remained muted for much of the week, as investors monitored developments in the Middle East and awaited the Federal Reserve’s interest rate decision and updated economic projections. Both the Swiss National Bank (SNB) and the Norwegian Central Bank cut rates last week. The SNB reduced rates to zero for the first time since mid-2022, as Switzerland struggles to curb the value of the Swiss franc, which has appreciated 10% against the US dollar so far in 2025. For the week, the EuroStoxx50 and STOXX 600 closed lower, down 1.55% and 1.73% respectively.

In the UK, the FTSE 100 declined last week, following the broader market trend amid ongoing concerns about the situation in the Middle East. The Bank of England’s interest rate decision came as expected. However, the increasing number of Monetary Policy Committee members voting in favour of a rate cut suggests growing concern about economic growth and labour market stability, rather than solely inflation control. Meanwhile, the rate of inflation slowed to 3.4% in May, in line with expectations and slightly down from April’s 3.5%. Transport costs, particularly lower airfares during the Easter period, contributed to the overall decline. In corporate news, AstraZeneca announced a $5.2 billion partnership with a Chinese biotech firm to develop new treatments for chronic diseases using artificial intelligence. For the week, the FTSE 100 closed 1.08% lower.