June 15, 2026

“All we are saying, is give peace a chance”

John Lennon

PEACE In the MIDDLE EAST?

The S&P 500 was off slightly down.17%, the Dow Jones Industrial Average finished up .40, the Nasdaq surrendered .68%, Internationally, the news was better, the FTSE 100 gained .99% and the MSCI-EAFE added .95%. The 2-Year Treasury paid 4.087 and the 10-Year yield was 4.483%.

So, what happened? U.S. equities showed resilience amid volatility driven by geopolitical developments (U.S.-Iran tensions), chip stock swings, inflation data, and a strong rebound late in the week. Major indices posted modest weekly gains after a pullback the prior week, with tech and growth stocks leading to the recovery. With the announced end of the Iran War. Markets soared today. Driven by the opening of the straight of Hormuz and allowing oil exports to flow to the world market. As expected oil prices fell.

Markets digested a hot May jobs report, inflation prints, and news flow around Iran. A late week rebound (aided by easing oil prices and positive sentiment around events like the SpaceX IPO) helped indices finish modestly higher. Broader participation improved somewhat, though tech remained influential

In the bond markets, bonds faced pressure from persistent inflation signals and a resilient economy, pushing yields higher and prices lower. U.S. Treasuries reacted with the 10-year yield ended around as previously mentioned, at 4.48–4.49% (up modestly on the week, with intra-week moves above 4.5%). The 2-year yield was near 4.09–4.17%. The curve remained upward-sloping but showed some flattening dynamics amid rate repricing. Bloomberg U.S. Aggregate Bond Index: Down roughly -0.5% for the week, reflecting higher yields. In Corporate Bonds: Investment-grade corporates declined (-0.59%), with spreads relatively stable/tight. High yield also saw modest weakness but held up on strong fundamentals. Yields rose overall due to stronger-than-expected economic data and reduced expectations for near-term Fed rate cuts.

What about inflation? Key inflation readings dominated and came in firm, reinforcing a “higher for longer” narrative. Consumer Price Index for May can in at +0.5% MoM; +4.2% YoY (highest in three years, in line with expectations). Core CPI also showed persistence. Producer Price Index (The Federal Reserve preferred index) for May was +1.1% MoM; +6.5% YoY (accelerated and hotter than expected, signaling upstream pressures).

In other news, Strong May employment data from the prior week continued to influence sentiment; jobless claims and other releases were monitored but secondary. Inflation reacceleration concerns, combined with solid growth, kept markets on edge regarding Fed policy.

Finally, no good news in the mortgage market. Mortgage rates edged higher alongside Treasury yields and inflation data.30-year fixed-rate mortgage average: 6.52% (as of June 11, up from 6.48% the prior week). Still below year-ago levels (6.84%) but reflecting recent volatility. 15-year fixed: Around 5.84% (also up modestly). (Freddie Mac’s weekly survey (for the week ending June 11) Homebuyer demand showed some resilience despite rates, with applications ticking up in prior periods amid stable (if elevated) conditions.

So, looking ahead, IF the peace deal succeeds Iran or Israel don’t upset the agreement or not do their part the conditions in the market will change in reaction to the bad news, however if it holds good things specifically drop in oil prices, inflation, and anxiety in the markets will follow. As for stocks, Volatility likely persists with geopolitical risks (IRAN), earnings focus, and inflation watch. AI/tech resilience and broad market participation will be key. Good news after today the Tech heavy Nasdaq took off!

As for Bonds, higher yields offer attractive income, but duration-sensitive assets face headwinds unless inflation cools. Credit sectors benefit from solid fundamentals. And interest rates and Mortgages will be dependent on upcoming Fed decisions and inflation trajectory. Sticky prices could delay easing.

So, as we ease into summer, things are looking good, after this weekend, but when dealing with Iran and Israel, (Israel would like to finish the destruction and force a regime change, President Trump is trying to avoid destroying the Iranian economy and further punish it’s people, and cost the US the price of reconstruction). Each country’s interest in these end are not aligned which means no one really knows if all of the accomplishments will hold.

Mike