Investment update

Weekly insight into the marketplace.

June 16 to June 20, 2025

Middle East tensions weighed on performance

The week started well for the major North American stock indexes, as investor sentiment was buoyed by reports that Iran was seeking U.S. support to broker an immediate ceasefire with Isreal. The Dow and S&P 500 closed Monday’s trading sessions with gains of 0.75% and 0.94%, respectively, while the Nasdaq surged 1.52%. Canada’s TSX rose 0.24% on strong performances by base metal and tech stocks. Investor optimism waned on Tuesday, as the Middle East conflict continued and U.S. President Donald Trump took to social media to demand Iran’s unconditional surrender and threaten its leader, Ali Khamenei. The Dow dropped 0.70%, the S&P 500 slid 0.84%, and the Nasdaq fell 0.91%. The TSX also declined, shedding 0.10% after all but the energy sector experienced losses. On Wednesday, U.S. stock markets closed with mixed results after the Federal Reserve (the Fed) announced it was holding interest rates steady. The Dow and S&P 500 experienced small losses, while the Nasdaq edged up 0.13%. The TSX inched up 0.07%. On Thursday, the TSX was the only North American index in action, as U.S. markets were closed for the Juneteenth holiday. The resource-heavy Canadian benchmark lost 0.21% as strong performance by energy stocks was offset by losses from other sectors. The TSX declined modestly again on Friday, held back by weakness in the tech sector, and ending the week with a 0.03% loss. Friday’s session on Wall Street was uneven as investors monitored the latest developments in the Middle East. The Dow added 0.1%, while the S&P 500 and the Nasdaq fell 0.2% and 0.5%, respectively.

Canadian and U.S. leaders agreed to pursue a trade deal

On Monday, investors received a glimmer of hope that the months-long trade war launched by the Trump administration against Canada may soon come to an end. In a sideline meeting at the G7 summit, Prime Minister Mark Carney and U.S. President Donald Trump agreed to accelerate trade talks, aiming to reach a deal within 30 days. In a social media post about his meeting with Trump, Carney said: “We agreed to pursue negotiations toward a deal within the coming 30 days. I’m looking forward to continuing this work at this summit and in the weeks ahead.” For his part, Trump admitted that while he’s a “tariffs person” who believes that placing levies on products from other countries will raise revenue and bring jobs back to the U.S., he also thinks Carney has a different concept that could work. “I think Mark has a more complex idea, but it’s still very good. I think we’re going to accomplish a lot.” The U.S. President also noted that he’s “developed a very good relationship” with Carney. On Thursday, Carney announced a program to help stabilize Canada’s steel and aluminum sectors that have been hit hard by U.S. tariffs. Measures include a quota on foreign steel and a potential tax hike on U.S. imports if Canada and the U.S. can’t reach a trade deal within a month.

The U.S. central bank held interest rates steady

On Wednesday, the Fed announced it would keep its policy rate unchanged at 4.25 to 4.50%, marking the sixth straight decision to hold. While investors had expected a cut, the Fed emphasized its “wait‑and‑see” stance, given ongoing economic uncertainties. The Summary of Economic Projections – often called the “Dot plot” – still points to two quarter‑point rate cuts in 2025. At a press conference after the decision, Fed Chair Jerome Powell explained: “Increases in tariffs this year are likely to push up prices and weigh on economic activity,” and added: “We don’t yet know with any confidence where (the tariffs) will settle out.” President Trump, who has been outspoken in his criticism of Powell and the Fed’s reluctance to cut interest rates, referred to the decision as “stupid” and accused Powell of being politically motivated.