Stocks Struggle Amid Geopolitical Tensions, Oil Rises for Third Week as Trump Weighs U.S. Action on Iran

Economic

Middle East Situation

Summary:

Global stock markets faced uncertainty on Friday, as concerns over the potential U.S. involvement in the Israel-Iran conflict weighed on investor sentiment...

Oil Prices Poised for Third Consecutive Weekly Gain

Brent crude oil experienced a 2% decline on Friday, settling at $77.22 per barrel, but remained on track for a solid weekly gain of 4%, following a strong 12% surge the previous week. The rise in oil prices comes amid intensifying conflict between Israel and Iran. The White House stated that U.S. President Donald Trump would decide within two weeks whether to involve the U.S. in the conflict, a move that has caused significant debate within the political landscape. The potential for U.S. action, along with the disruption in Middle Eastern energy flows, has kept oil prices elevated.

The ongoing Israel-Iran conflict has seen Israel bomb Iranian nuclear targets, while Iran retaliated by launching missiles and drones at Israel, signaling no immediate resolution to the situation. Although the U.S. has not made a definitive move, the looming two-week deadline for Trump's decision has added to the uncertainty in markets. Despite the tension, analysts like Tony Sycamore of IG caution that the deadline could pass without concrete action, as seen in previous instances involving Russia, Ukraine, and trade tariffs.

Asian Markets Struggle as U.S. Markets Remain Closed

In Asia, stock markets were hesitant, with major indices struggling to find direction. U.S. markets were closed for the Juneteenth holiday, leaving Asian markets without clear guidance. Nasdaq futures and S&P 500 futures were both down by 0.3%, while the MSCI index of Asia-Pacific shares outside Japan inched up by 0.1%, though it was still set for a weekly loss of 1%. Japan’s Nikkei index dropped by 0.2%, while China’s blue chips rose by 0.3%, and Hong Kong’s Hang Seng gained 0.5%.

In the currency markets, the U.S. dollar weakened by 0.2% to 145.17 yen, following a rise in Japan’s core inflation, which reached a two-year high in May. This increase in inflation kept pressure on the Bank of Japan to reconsider its interest rate stance, although investors anticipate no rate hikes from the BOJ until December.

The U.S. bond market opened on a subdued note, with the 10-year Treasury bond yield remaining flat at 4.389%, and the two-year yield slipping by 2 basis points to 3.925%. Globally, central banks were active, with the Swiss National Bank cutting rates to zero and hinting at the possibility of negative rates, while the Bank of England opted for a steady policy stance, acknowledging the need for further easing. Norway’s central bank surprised markets by cutting rates for the first time since 2020.

Gold prices eased by 0.2%, trading at $3,363 per ounce, and were set for a weekly loss of 2%. Despite the slight dip, gold prices remained elevated compared to earlier in the year, continuing to be a safe-haven asset in uncertain times.

While stock markets in Asia struggled to find direction amid rising geopolitical risks, oil prices continued to climb, benefiting from the Israel-Iran conflict. With geopolitical tensions and central bank policies driving market volatility, investors are closely watching the unfolding situation in the Middle East and potential decisions by the U.S. on its involvement in the conflict. The markets' cautious mood, combined with fluctuating oil and gold prices, highlights the ongoing uncertainties in global financial markets.

Source: Reuters

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Kevin Du

Cryptocurrency

• U.S. government establishes Bitcoin as a strategic reserve asset.

• Bitcoin treated similarly to gold in reserves.

• Future implications for altcoin recognition as reserve assets.

U.S. Establishes Strategic Bitcoin Reserve

President Trump signed an order on March 6, 2025, establishing the U.S. Strategic Bitcoin Reserve.

This positions Bitcoin alongside traditional assets, impacting market perceptions and institutional roles.

U.S. Establishes Strategic Bitcoin Reserve

President Trump with the Treasury, initiated the Strategic Bitcoin Reserve, marking an official shift in U.S. reserve strategy. This action parallels traditional gold reserves, aligning with prior digital asset reviews.

"The United States will not sell bitcoin deposited into this Strategic Bitcoin Reserve, which will be maintained as a store of reserve assets." - President Donald J. Trump

The U.S. Treasury and Department of Commerce are tasked with augmenting the reserve budget-neutrally. Bitcoin is now seen as a sovereign asset, setting a global precedent.

Bitcoin's Market Value Set to Soar

The move drastically reduces Bitcoin's circulating supply, potentially raising its value. Institutional confidence in Bitcoin's store-of-value role has surged, contrasting with altcoin perspectives.

The new reserve strategy may bolster Bitcoin's market status while reinforcing its geopolitical importance. Other cryptocurrencies continue to play peripheral roles without government backing.

Bitcoin's Shift Mirrors Historical Gold Standard

Bitcoin's elevation mirrors the gold standard's historical impact. ETF approvals in 2024 highlighted its rising institutional appeal, but altcoins lack similar affirmative governmental steps.

Experts predict Bitcoin's increased scarcity may boost its valuation. Historical trends suggest altcoins are unlikely to achieve store-of-value recognition without further institutional endorsements.

Source: CryptoSlate

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Samantha Luan

Cryptocurrency

• Main event, leadership changes, market impact, financial shifts, or expert insights.

• Launch offers 50x leverage on BTC, ETH, BNB, XRP, SOL.

• High-leverage trading impacts market volatility and liquidity dynamics.

Binance Unveils 50x Leverage Crypto Contracts

Binance Futures plans to launch new quarterly 1226 contracts featuring BTC, ETH, BNB, XRP, and SOL after June 27, 2025. This offering will include up to 50x leverage for traders. This move aims to enhance capital efficiency and exposure for traders. Market implications include increased liquidity and volatility, particularly around the launch date.

Binance Unveils 50x Leverage Crypto Contracts

Binance Futures has announced the launch of its USD-denominated and coin-margined quarterly 1226 contracts, setting the stage for significant engagement. The contracts, offering up to 50x leverage, span BTC, ETH, BNB, XRP, and SOL, and are available 24/7. The new contracts are designed to push liquidity and engage active traders, aligning with Binance's strategy of expanding its derivatives offerings. Market anticipation suggests a potential surge in trading volumes, as noted in previous launches.

While key leaders have yet to comment publicly on this new initiative, historical trends show Binance's consistent focus on expanding trading products with advanced leverage features.

Market Data Overview

Did you know? Binance's historical contract launches often lead to short-lived volume spikes in the cryptos concerned, particularly notable during initial release hours.

Bitcoin (BTC) is currently priced at $104,588.66 with a 24-hour volume of $36.56 billion, marking a 24.70% drop. Market cap stands at $2.08 trillion, with circulating supply at 19.88 million. Notably, its 90-day change is a gain of 24.28%, highlighting price volatility.

Bitcoin(BTC), daily chart, screenshot on CoinMarketCap at 03:15 UTC on June 20, 2025. Source: CoinMarketCap.

Data from CoinMarketCap indicates Bitcoin's market dominance at 64.06%, suggesting robust investor interest despite fluctuations. The Coincu research team anticipates the new Binance contracts to potentially drive significant shifts in derivative trading patterns across these assets. The provision of 50x leverage may amplify speculative trading. Additionally, the ongoing absence of commentary from key opinion leaders points to a quiet yet pivotal market shift.

Source: CryptoSlate

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Gerik

Economic

Commodity

Easing Geopolitical Tensions and Federal Reserve’s Inflation Warning

Gold futures dropped by 0.5%, trading near $3,353 per ounce on Friday, marking a decline of more than 2% for the week. This drop follows the easing of geopolitical tensions in the Middle East, particularly as U.S. President Donald Trump is expected to decide in the next two weeks whether to engage in military action against Iran. A potential de-escalation in the region has reduced fears of disruptions to energy flows and inflationary pressures, which typically drive demand for gold.

Moreover, earlier in the week, Federal Reserve Chairman Jerome Powell highlighted inflation risks, particularly from the tariffs introduced under Trump’s administration. These concerns have increased the likelihood of fewer rate cuts by the Federal Reserve. Gold, which typically thrives in a low-interest-rate environment, has thus been under pressure, as higher rates tend to reduce the appeal of non-interest-bearing assets like bullion.

Investor Preferences Shift Amid Elevated Gold Prices

Despite the drop this week, gold is still up over 25% for the year and remains near the record levels just above $3,500 per ounce, achieved in April. However, some investors have started shifting their focus to platinum as an alternative safe-haven investment, given gold's elevated prices. This reflects concerns that the gold rally may be losing momentum.

The outlook for gold prices remains divided among major Wall Street banks. Goldman Sachs has reaffirmed its bullish forecast for gold, predicting that it could reach $4,000 per ounce by next year. On the other hand, Citigroup has a more bearish outlook, expecting prices to fall below $3,000 by 2026. These differing predictions reflect the uncertainty surrounding both the geopolitical landscape and future monetary policies, making the short-term direction of gold prices difficult to predict.

Gold is experiencing its first weekly decline in three weeks as the softening of geopolitical tensions and a more cautious Federal Reserve dampen demand for the precious metal. Although gold prices remain significantly higher than at the beginning of the year, concerns about future rate cuts and investor preference for other metals like platinum suggest that the rally may be losing steam. The contrasting forecasts from major banks further illustrate the uncertainty surrounding gold’s future performance, with some predicting further gains while others anticipate a retreat.

Source: Bloomberg

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Damon

Economic

Share markets in Asia struggled for direction on Friday as fears of a potential US attack on Iran hung over markets, while oil prices were poised to rise for a third straight week on the escalating Israel-Iran conflict.

Overnight, Israel bombed nuclear targets in Iran, and Iran fired missiles and drones at Israel as a week-old air war intensified with no sign yet of an exit strategy from either side.

The White House said President Donald Trump will decide in the next two weeks whether the US will get involved in the Israel-Iran war. The US president is facing uproar from some of his MAGA base over a possible strike on Iran.

Brent fell 2% on Friday to US$77.22 (RM328.30) per barrel, but is still headed for a strong weekly gain of 4%, following a 12% surge the previous week.

"The 'two-week deadline' is a tactic Trump has used in other key decisions, including those involving Russia and Ukraine, and tariffs," said Tony Sycamore, an analyst at IG.

"Often, these deadlines expire without concrete action, (similar to 'Trump always chickens out' or TACO), and there is certainly a risk of this happening again, given the complexities of the situation."

Still, a cautious mood prevailed in markets with Nasdaq futures and S&P 500 futures both 0.3% lower in Asia. US markets were closed for the Juneteenth holiday, offering little direction for Asia.

The MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1% but was set for a weekly drop of 1%. Japan's Nikkei slipped 0.2%.

China's blue chips rose 0.3%, while Hong Kong's Hang Seng gained 0.5%, after the central bank held the benchmark lending rates steady as widely expected.

In the currency markets, the dollar was on the back foot again, slipping 0.2% to 145.17 against the yen after data showed Japan's core inflation hit a two-year high in May, which kept pressure on the Bank of Japan (BOJ) to resume interest rate hikes.

Investors, however, see little prospects of a rate hike from the BOJ until December this year, which is a little over 50% priced in.

The US bond market, which was also closed on Thursday, started trading in Asian hours on a subdued note. The 10-year Treasury bond yield was flat at 4.389%, while two-year yields slipped two basis points to 3.925%.

Overnight, the Swiss National Bank cut rates to zero and did not rule out going negative, while the Bank of England held policy steady but saw the need for further easing and Norway's central bank surprised everyone and cut rates for the first time since 2020.

Gold prices eased 0.2% to US$3,363 an ounce, but were set for a weekly loss of 2%.

Source: Theedgemarkets

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Samantha Luan

Political

The New York City Police Department said on Thursday its hate crime unit was probing anti-Muslim threats against mayoral candidate Zohran Mamdani, and in another incident U.S. Representative Max Miller of Ohio said he was "run off the road" by a driver with a Palestinian flag.

These marked the latest U.S. incidents to raise concerns about a rise in hate against Americans of Muslim, Arab, Jewish, Israeli and Palestinian heritage since the start of Israel's war in Gaza in late 2023.

An NYPD spokesperson said police received reports that on Wednesday at 9:45 a.m., Mamdani, a Democratic state assembly member and mayoral candidate, reported that he "received four phone voicemails, on various dates, making threatening anti-Muslim statements by an unknown individual."

There have not been any arrests so far and an investigation remained ongoing, the NYPD said. The New York Daily News reported a man threatened to blow up Mamdani's car. Mamdani's campaign said he was participating in the police probe.

Separately, Republican U.S. Representative Max Miller from Ohio said on X he was "run off the road" in the city of Rocky River on Thursday, while he and his family were threatened by a person with a Palestinian flag. He said he had filed a police report.

"Today I was run off the road in Rocky River, and the life of me and my family was threatened by a person who proceeded to show a Palestinian flag before taking off," said Miller, who is Jewish and pro-Israeli. He labeled the incident, which was also condemned by top congressional Democrats, as antisemitic.

Recent incidents that raised alarm over antisemitism and anti-Israel attitudes in the U.S. include a fatal shooting of two Israeli embassy employees in Washington and a Colorado attack that left eight people wounded when a suspect threw incendiary devices into a pro-Israeli crowd.

Incidents raising alarm about anti-Muslim and anti-Palestinian prejudice include the fatal stabbing of a 6-year-old Palestinian child in Illinois, the attempted drowning of a 3-year-old Palestinian American girl in Texas and a violent mob attack on pro-Palestinian protesters in California.

New York City Mayor Eric Adams said on Thursday, opens new tab a suspect was taken into custody and "charged with multiple counts of assault and aggravated harassment as hate crimes" in an alleged attack against a Muslim woman who was beaten on a subway train.

Source: Reuters

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James Whitman

Political

A federal judge on Thursday blocked President Donald Trump's administration from forcing 20 Democratic-led states to cooperate with immigration enforcement in order to receive billions of dollars in transportation grant funding.

Chief U.S. District Judge John McConnell in Providence, Rhode Island ruled, opens new tab that the U.S. Department of Transportation lacked authority to require the states to cooperate with U.S. Immigration and Customs Enforcement to obtain transportation funding and that the condition violated the U.S. Constitution.

McConnell said the administration provided no plausible connection between cooperating with immigration enforcement and the purposes Congress intended for the funding, which is to support highways, bridges and other transportation projects.

"Congress did not authorize or grant authority to the Secretary of Transportation to impose immigration enforcement conditions on federal dollars specifically appropriated for transportation purposes," McConnell wrote.

The judge, an appointee of Democratic President Barack Obama, issued a preliminary injunction preventing such a condition from being enforced against the 20 states that sued along with their government subdivisions, like cities.

The Trump administration did not respond to a request for comment. It has argued the policy was within the department's discretion.

The ruling came in a lawsuit filed by a group of Democratic state attorneys general who argued the administration was seeking to unlawfully hold federal funds hostage to coerce them into adhering to the Republican president's hardline immigration agenda.

They sued after U.S. Transportation Secretary Sean Duffy on April 24 notified states they could lose transportation funding if they do not cooperate with the enforcement of federal law, including with ICE in its efforts to enforce immigration law.

Since returning to office on January 20, Trump has signed several executive orders that have called for cutting off federal funding to so-called sanctuary jurisdictions that do not cooperate with ICE, as his administration has moved to conduct mass deportations.

Sanctuary jurisdictions generally have laws and policies that limit or prevent local law enforcement from assisting federal officers with civil immigration arrests.

California Attorney General Rob Bonta, in a statement, hailed McConnell's ruling, saying Trump had been "treating these funds – funds that go toward improving our roads and keeping our planes in the air – as a bargaining chip."

The 20 states are separately pursuing a similar case also in Rhode Island, challenging new immigration enforcement conditions the Homeland Security Department imposed on grant programs.