President Donald Trump took to Truth Social early Tuesday morning to clarify that he did not leave the G-7 summit early to work on a ceasefire between Israel and Iran, auguring a gap down for the major equity indexes at the opening bell.
Fair to middling incoming economic data did little to change the short-term trend and will do nothing to alter the Federal Reserve's present course, with mixed messages from "soft" surveys and "hard" sources reflecting near-universal uncertainty about tariffs and their impact on inflation.
Monetary policymakers have convened, the next Fed meeting is underway and markets expect, with a 99.9% certainty, the FOMC will hold the federal funds rate at 4.25% to 4.50% come Wednesday at 2 pm ET.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
We continue to track news and developments related to the FOMC meeting on our live Fed blog.
President Trump told reporters later Tuesday that he wants a "real end" to the conflict between Israel and Iran – which means a resolution of the nuclear negotiations with the Islamic Republic and a permanent end to its ambitions for a fission weapon.
"Iran should have signed the 'deal' I told them to sign," Trump posted. "What a shame, and waste of human life. Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!"
Channeling Ulysses S. Grant and Franklin D. Roosevelt, shortly after noon, the president signaled his willingness to engage in an extended and perhaps expanded mission.
"UNCONDITIONAL SURRENDER," he posted, and investors, traders and speculators accelerated their selling.
The Cboe Volatility Index (VIX) spiked as high as 20.99 ahead of Tuesday's open from 19.11 as of Monday's close and then surged to 21.79 late in the trading day, the "fear gauge" breaching its "normal" range of 12 to 20.
Expectations game
Cooling CPI… cooling PCE… softening retail sales… softening industrial production… and yet the rate-cut watch goes on. According to Nick Timiraos of The Wall Street Journal, firm-for-now policy interest rates are about inflation expectations.
"Officials are worried over how tariff announcements since March could disrupt what economists refer to as 'inflation expectations'," Timiraos writes.
What consumers and businesses think inflation will be in the future "can't be seen or touched" and are therefore "very tricky to measure," but also "very important" to Powell and his fellow policymakers.
The Census Bureau said retail sales declined by 0.9% in May vs a FactSet-compiled consensus expectation for a 0.7% slide. A 0.1% gain in April was revised downward to a 0.1% decline.
The Federal Reserve Board reported a 0.2% decline in industrial production in May against expectations for no change following a 0.1% rise during April.
"The Fed will hold its nose on the weak retail sales and industrial production data," writes BMO Capital Markets Chief U.S. Economist Scott Anderson. Powell and the FOMC will "keep rates unchanged this week as it continues to gauge the inflationary and growth implications of the administration's tariff policies."
By the closing bell, the Dow Jones Industrial Average had shed 0.7% to 42,215, the S&P 500 was down 0.8% at 5,982, and the Nasdaq Composite had lost 0.9% to 19,521.
Is investing in gold worth it?
Warren Buffett did not say gold is a "barbarous relic." John Maynard Keynes did. But the Oracle of Omaha, much like the father of modern economics, placed little value in the precious metal. So, is investing in gold worth it?
"No," these eminences would likely agree.
That hasn't stopped the front-month gold futures contract from rising 29% year to date through Monday amid historic volatility spikes to the upside and the downside, as well as still-mushrooming global uncertainty.
Gold traded lower Tuesday but bounced off its intraday low as President Trump once more took to social media to conduct foreign policy and define military strategy.
So far this year, the yellow metal is outperforming the S&P 500 and the bond market as well as bitcoin, even as "digital gold," too, has reached new all-time highs.
If you're prone to price and don't care about oracles and/or eminences, the best gold ETFs offer efficient exposure to the barbarous relic's upside.
Related content
- Earnings Calendar and Analysis for This Week (June 16-20)
- We Are Peter Lynch: How to Invest in What You Know
- What Are Dividend Stocks?
-
How Amazon Will Deliver Your Prime Day 2025 Orders — From Vans to DronesAmazon Prime Day returns July 8–11 with 96 hours of deals, and a wide range of high-tech and flexible delivery options to match the shopping surge.
-
Chase Increases Sapphire Reserve Annual Fee by 45%: Are the New Perks Worth It?Chase announced sweeping changes to its Sapphire Reserve card.
-
We Are Peter Lynch: How to Invest in What You KnowTake a look around, go to a free stock market data website, and get to work.
-
Trump Tariffs and Taxes: Waiting to See What Happens Is Not a StrategyLike presidents, tariffs come and go. Policy changes also shift about every two years with the election cycle. If you're paralyzed by uncertainty, you could be missing opportunities to benefit your financial future.
-
Is a Family Office Right for You? The Multimillion-Dollar QuestionAs ultra-high-net-worth individuals increase in number, many are turning to family offices to manage their complex finances. Here's how family offices work, courtesy of a finance professional.
-
This Is How a Lot of Law School Students Are CheatingGrowing numbers of students are falsely claiming a learning disability to score more time to take tests. This has real-world consequences in which fellow students, law firms and their clients pay the price.
-
Stock Market Today: Stocks Rise on Less Deadly ConcernsMarkets are forward-looking mechanisms, and it's good when price action shows there's a future to look forward to.
-
Who Will Replace Jerome Powell as Fed Chair?Even if President Trump doesn't make good on threats to fire Chair Powell, the Fed leader's term ends in 2026.
-
If You're Ignoring Private Markets, You're Missing Most of the ActionPrivate markets are becoming increasingly essential for all investors, not just institutions, and they are now more easily accessible thanks to innovative investment structures.
-
Three Ways Women Can Keep Caregiving From Draining Them FinanciallyMany women care for older relatives. While commendable, it could put their retirement at risk … unless they find a way to prioritize themselves.
