Investment update

Weekly insight into the marketplace.

June 9 to June 13, 2025

Markets wavered amid Middle East tension

Canada’s TSX dipped 0.2% on Monday, led by losses from technology and financial stocks. The Canadian dollar climbed against its U.S. counterpart, though, after Prime Minister Mark Carney announced that his government would reach NATO’s military spending target (2% of national GDP for the fiscal year) five years ahead of the previous plan. The Wall Street benchmarks were mixed, with 1% gains for Amazon and Alphabet shares providing a boost to the tech sector, but concerns over U.S.-China trade restraining the overall gains. The S&P 500 was up 0.1%, the Nasdaq added 0.3%, and the Dow slipped 0.1%. Optimism for a positive outcome from the U.S.-China trade meeting, and a 5.6% gain for Tesla stock, helped markets remain positive on Tuesday. The price of oil spiked on Wednesday after U.S. President Donald Trump expressed doubt that the U.S. and Iran would make a deal on nuclear weapons. The knock-on rise in energy sector prices helped Canada’s TSX reach a new record, but the Middle East tensions kept Wall Street’s daily performance subdued. The S&P 500 declined 0.3%, the Nasdaq lost 0.5%, and the Dow closed flat. On Thursday, the prospect of a U.S.-Canada trade deal helped the TSX reach another record close. In the U.S., AI-optimism following a strong outlook from Oracle offset declines in shares for Boeing after the Air India crash. The S&P 500 gained 0.4%, while the Nasdaq and the Dow rose 0.2%. On Friday, a Statistics Canada report said manufacturing sales fell 2.8% in April as the impact of U.S. tariffs started to take effect. That data, and Israel’s military strike on Iran, dragged the TSX back from record highs. The attack, and fear of escalation, also pushed U.S. investors into a risk-off mindset. All three of the major Wall Street indexes closed lower on the day and had a losing week.

U.S. inflation rose less than expected

Despite expectations that consumer prices would spike in May as a result of U.S tariffs on its global trade partners, the latest U.S. inflation data showed only a moderate increase. According to the Bureau of Labor Statistics May’s Consumer Price Index (CPI) report, headline inflation rose 2.4% year-over-year in May. That’s up slightly from April’s 2.3% (the lowest increase since February 2021), but below analysts’ 2.5% forecast. On a monthly basis, consumer prices increased 0.1%, which is down from both April’s 0.2% rise and the expected 0.2% increase. Core inflation, which removes volatile food and energy prices, rose 2.8% annually and 0.1% monthly. Both figures were below the 2.9% and 0.3% respective predictions. Lower automobile and clothing prices drove May’s cooler-than-anticipated data. The Producer Price Index, which measures inflation at a wholesale level (also released by the Bureau of Labor Statistics), showed a 0.1% increase in May. That’s up from a revised 0.2% decline in April. Both inflation indicators will factor in this week’s Federal Reserve (The Fed) interest-rate decision.

U.S.-China trade and growth forecasts were in focus

A delegation of top U.S. and Chinese officials met in London on Monday for a planned two-day meeting focused on renegotiating a trade truce. The preliminary agreement between the two superpowers, established in Geneva last month, was in danger of falling apart after both countries accused the other of violating the terms of the deal. White House economic adviser and director of the National Economic Council Kevin Hassett also told reporters that the U.S. wanted a literal handshake on a rare-earths deal with China. After two days of talks, U.S. Commerce Secretary Howard Lutnick said, “We have reached a framework to implement the Geneva consensus.” China’s Vice Commerce Minister Li Chenggang echoed those sentiments in a separate report. The deal was later confirmed by U.S. President Donald Trump on Wednesday, who wrote on his social media platform that the U.S. would get rare-earth minerals from China, and tariffs on Chinese goods would increase to 55% (from 30%). In return, China will levy 10% tariffs on U.S. imports, and Chinese students will be allowed to attend U.S. universities and colleges. Projecting possible implications of all the global trade developments in 2025, the World Bank cut its global growth forecast for the year to 2.3% (down from 2.7%) on Tuesday, citing higher tariffs and greater economic uncertainty as major threats.