Porridge, sir...
“What was that, Barrymore?” – “Porridge, sir...” That, perhaps, best sums up last Friday, when investors staged a broad-based sell-off across nearly the entire market. Yes, there was a reason for it – the war in the Middle East, which is still ongoing.
However, on Monday, market participants suddenly looked at it all from a different angle and decided that, really, nothing too terrible was happening. One war today, another tomorrow – what difference does it make? In short: porridge, sir! So the fear was brushed aside and off they went shopping. That, in essence, was the simple rationale behind the rally – and it played out brilliantly.
From the opening of the main session, the market moved higher and stayed there right through to the final bell, with little sign of anxiety. Only defence-sector stocks showed slight declines – logical enough, given that they were among Friday’s main beneficiaries. In short, everything returned to normal, and the indexes quickly and effortlessly regained all the ground lost over the previous week – with the exception of the good old Dow (DJIA-30), which rose by 0.75% on Monday after losing 1.32% the week before.
Its peers performed even better. The main U.S. benchmark, the S&P 500, gained nearly 1% (+0.94%), more than double its losses from the prior week. The NASDAQ Composite, meanwhile, was the clear leader, climbing an impressive 1.52% on the back of strong demand for chip and semiconductor stocks.
Among those, Advanced Micro Devices (AMD) was the standout performer in the S&P 500, gaining nearly 9% (+8.81%) in a single day. The surge followed a target price upgrade from $125 to $140 by analysts at Piper Sandler, who cited the competitiveness of AMD’s newly unveiled products – the Instinct MI350 accelerators and the MI400 “Helios” server racks – as a key factor. According to the analyst, AMD is now well-positioned to compete with Nvidia (NVDA) in the AI hardware space.
As for the ITS family of indexes, they largely mirrored global and U.S. market trends. The ITS World Index (ITSW) and the ITS Shariah Index (ITSS) recorded solid gains of 0.69% and 0.75% respectively. The ITSS might have risen even further if not for some localised profit-taking in pharmaceutical stocks on Monday.
In fact, only 8 of the 30 companies in the ITSS ended the day in the red – six of them from the Healthcare sector. Meanwhile, the leaders in both indexes were all tech firms, led once again by AMD, along with major Big Tech names such as Adobe Inc (ADBE, +2.57%), Cisco Systems, Inc (CSCO, +2.22%) and Taiwan Semiconductor Manufacturing ADR (TSM, +2.17%). Encouragingly, the strong demand for these stocks suggests that investors remain optimistic about the current state of the market.
Market outlook for 17 june 2025
Investors are going with the flow – what else can they do? Politics is calling the shots, and market participants can only follow the headlines and react accordingly, either selling off or snapping up shares. But this is really the domain of speculators. For medium- and long-term investors, it might be wiser to step aside for now and avoid getting caught up in the madness.
On Monday, tensions surrounding the Middle East seemed to ease – at least from the investors’ point of view. But by Tuesday morning, anxiety returned like morning fog, following President Trump’s sudden departure from the G7 summit. The situation is best summed up by the feeling of flying blind – nothing is clear, but it’s unsettling. Against this backdrop, global stock indexes have started to edge lower. Thankfully, they are edging lower – not crashing.
In Asia, the negative reaction has been minimal – most local indexes are down just a few tenths of a percent. But in Europe, investor fears are much more tangible, and the sell-off is noticeably stronger. At the opening of Tuesday trading, European indexes were down around 1% compared to Monday’s close, with no signs of improvement so far.
Futures trading on major U.S. indexes is relatively calm. Prices remain in the red more due to momentum – under the influence of what’s happening in Europe and Asia – rather than any fresh news. The declines remain modest (within -0.3%) and don’t indicate much on their own.
The key economic event of the day – economic, and that’s important – will be the release of May retail sales data. Analysts expect a 0.5% drop, which is clearly not encouraging. It’s not a catastrophe, but it could be an early warning sign of a potential slowdown in U.S. economic activity. The only comfort is that we’ve seen plenty of these “warnings” before, yet none have turned into anything worse. Hopefully, this time will be no different.
So today, investors will be closely following news from the White House, where the emergency task force is meeting and could announce unexpectedly bold decisions at any moment regarding the Iran-Israel conflict. In short, politics is once again taking precedence over economics – and there’s no escaping that.
For investors, the most important thing right now is to stay calm and not fall for every provocation that pops up in this whirlwind of news. If you’re not a speculator and don’t know how “to fish in muddy waters” – just step aside and enjoy the summer.