Market Movers & Shakers

U.S. equities treaded water during last week’s holiday shortened-trading week. Escalating tensions in the Middle East remained a key focus, while market participants also weighed the latest economic projections from the Federal Reserve’s June meeting. The S&P 500 finished the week lower by 0.15%, while the Nasdaq and Russell 2000 closed higher by 0.21% and 0.42%, respectively. Only three of eleven sectors in the S&P 500 managed to end the week in positive territory: Energy, Information Technology, and Financials. Outperformance in the Energy sector was supported by rising oil prices. WTI crude oil gained 1.1% last week, building on the prior week’s 13% spike, amid concerns about supply disruptions linked to Middle East tensions. Treasury yields were slightly lower across the curve. The yield on the 2-Year U.S. Treasury Note declined four basis points to 3.91%, while the benchmark 10-Year U.S. Treasury Note yield notched lower by three basis points to 4.38%. The CBOE Market Volatility Index, or VIX, climbed back above 20 but remained relatively subdued despite escalating geopolitical risks. Looking forward, investors’ focus shifts to Washington, D.C., where budget negotiations around the “Big, Beautiful Bill” are set to continue ahead of the White House’s July 4th deadline. In addition, Friday’s release of the Fed’s preferred inflation gauge—Core PCE—will be closely watched.



Source: FactSet

Over the weekend, the United States military carried out “Operation Midnight Hammer,” targeting three of Iran’s nuclear facilities—Fordo, Natanz, and Isfahan—using GBU-57 bunker-buster bombs dropped by B-2 stealth bombers and Tomahawk cruise missiles launched from U.S. submarines. The strikes came after more than a week of Israeli airstrikes on Iran’s air defenses and nuclear enrichment facilities. Involvement from the United States initially fueled a fresh spike in oil prices and stoked fears of a broader conflict breaking out in the Middle East. On Sunday, Iran’s parliament voted to close the Strait of Hormuz, a critical shipping chokepoint connecting the oil-rich Persian Gulf to the rest of the world on which nearly a quarter of global oil production flows through every year. Brent crude, a global benchmark for oil prices, briefly surged above $80/barrel, the highest mark since January. Despite the vote to close the waterway, the Strait of Hormuz remained open as the final decision ultimately rests with Iran’s Supreme National Security Council.

On Monday afternoon, Iran initiated a retaliatory strike against the United States, launching missiles at the Al Udeid Air Base in Qatar where the U.S. has a large military presence. U.S. officials confirmed the Iranian missiles bound for the base were intercepted and shot down by U.S. military forces and that there were no casualties and only minor damage. Iran’s attack was reportedly telegraphed well in advance, which was confirmed by President Trump, who said that the early notice “made it possible for no lives to be lost and nobody to be injured” and suggested that the U.S. would not respond. Markets initially sold off intraday as the news of the Iranian attack broke. However, stocks staged a large reversal, with the S&P 500 closing higher by 1% on the day once details emerged and it was evident the move was de-escalatory in nature. Oil prices tumbled on the news, falling more than 9%. On Monday evening, President Trump announced that Israel and Iran had agreed to a cease-fire that could lead to the end of the war between the countries.



Source: US Bureau of Economic Analysis

Switching gears, the Federal Reserve left policy unchanged at last week’s June FOMC meeting. The decision to hold the target policy rate range steady at 4.25%-4.50% was widely anticipated by market participants. The meeting also provided the latest Summary of Economic Projections (SEP), in which the Fed revised down this year’s growth forecast to 1.4% while it simultaneously increased its core inflation forecast to 3.1%. The unemployment outlook also saw a slight revision higher, up to 4.5%, which is 0.1% higher than the Fed’s forecast from March and 0.3% above the current unemployment rate. The revisions reflect the Fed’s expected impact of tariffs, which they view are likely to dampen growth while driving prices higher in the second half of 2025. The “dot plot” showed the median year-end rate projection was unchanged from March’s SEP, implying two 25 basis point rate cuts through year end, though the 2026 outlook now shows only one cut next year instead of two. Since last week’s meeting, a number of Federal Reserve officials have been on the tape suggesting the Fed could cut rates as soon as next month. Fed Governor Christopher Waller, who is widely considered to be in the running to succeed Powell, said on Friday he feels inflation risk from tariffs is low while worrying signs from the job market should cause the Fed to “start thinking about cutting the policy rate at the next meeting”. Michelle Bowman, the Fed’s Vice Chair for Supervision, echoed these comments, saying on Monday that “it is time to consider adjusting the policy rate” with inflation cooling and the labor market showing signs of weakness.

Updates & News*

Recent volatility and some weakness below the surface of the market over the last two weeks has accelerated the pace of investing new accounts and new deposits since our last transition update. Money that has been under Tandem’s management for two weeks is roughly 40% of the way in-line with our strategies, up from ~25% at the beginning of the month.

In terms of news, it has been a relatively quiet period without much to note – with one exception. Insurance brokerage firm and long-time Tandem holding, Brown & Brown, announced earlier this month that it would buy rival Accession Risk Management in a $9.83 billion cash-and-stock deal. Accession is currently the ninth largest privately held insurance brokerage in the U.S. and is parent to Risk Strategies, a specialty brokerage firm, and One90 Intermediaries, a leading insurance wholesaler and program manager. The acquisition is expected to bolster Brown & Brown’s footing in the middle-market segment, which caters to companies smaller than multinational corporations but larger than typical small businesses. Brown & Brown expects to fund the acquisition through $4 billion in equity issuance and $4 billion bond issuance across a range of maturities. The transaction is expected to close in the third quarter of 2025, subject to regulatory approvals.

Source: Source of all data is FactSet, unless otherwise noted.

*The transition level activity taken by Tandem is applicable to new manager-traded accounts and new money in manager-traded accounts, not the composite or firm-wide level. New manager-traded accounts and new money in manager-traded accounts are not automatically invested on the first day. Rather, they are transitioned into our strategy over a longer time period that is dependent upon market conditions, this process differs from Tandem’s model-provided strategies, where money is invested on the day the account opens. Strategy level activity is applicable to the composite and action is taken at the firm-wide level.

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