Uncertainty looms over the market

“Economic uncertainty has diminished but remains elevated.” These words from U.S. Federal Reserve Chair Jerome Powell, spoken at the press conference following yet another decision by the Federal Open Market Committee (FOMC) to keep the interest rate unchanged at 4.25–4.50%, did not sit well with market participants. They immediately triggered a brief sell-off that gave many investors a momentary scare. However, the dip was short-lived and largely harmless: it lasted only half an hour and ended on a high note – or more precisely, at zero.

And yet Wednesday had begun with genuine signs of optimism. Futures on the main U.S. indexes were up several tenths of a percent early in the morning, and as the opening bell drew closer, prices kept climbing. When trading finally began, all indexes surged – confidently and, more importantly, rapidly. It looked as though the bulls would dominate the day. But their strength quickly faded. Within an hour of the opening, the momentum was gone, and a wave of profit-taking rolled through the market. Prices began to drift steadily downwards, and by the time the FOMC's rate decision was announced – at 23:00 Astana time – the indexes were up by just 0.2-0.3%.

Then Mr Powell took the stage. He didn’t say anything new, but neither did he offer the kind of reassurance investors often expect. Uncertainty, uncertainty and more uncertainty. Hardly an uplifting message. So the final trading results on Wednesday, when the indexes ultimately closed around zero, should come as no surprise.

Sector performance was equally mixed. Five out of eleven sectors ended the day slightly in the green, while six closed slightly in the red. The best-performing stocks were in the financial sector, which gained an average of 0.37%, while the worst performers were in energy, down 0.73%. Neither result was particularly notable.

Meanwhile, the ITS index family moved in different directions. The ITS World Index (ITSW), which tracks global companies, lost around a third of a percent, while the Islamic index ITS Shariah (ITSS) finished the day up by a similar amount. A small gain – but a welcome one nonetheless.

ITSS was pushed into positive territory mainly by shares in leading technology companies. It's worth noting that most stocks in the index – 18 out of 30 – actually ended the day in the red. However, that weakness was outweighed by strong gains in heavyweight names like Oracle (ORCL), Cisco Systems (CSCO), NVIDIA (NVDA), Broadcom (AVGO), and others. These names speak for themselves. And the key takeaway is this: if demand for the shares of major economic growth drivers remains solid, it means investors still believe in the future – and are not too rattled by Mr Powell’s comments about “high uncertainty”.

As for the ITSW index, it was “tripped up” on Wednesday by two of the world’s biggest payment card issuers – MasterCard (MA) and Visa (V). Shares in both companies dropped sharply – by 5.39% and 4.88% respectively – after the U.S. Senate approved the GENIUS bill, which introduces a regulatory framework for stablecoin issuers. Under the legislation, issuers will be required to back their tokens with full reserves in U.S. dollars, Treasury bonds or other safe assets. The aim is to protect investors and reduce the risk of a stablecoin collapse – but the market didn’t seem to welcome the move.

Naturally, investors responded with enthusiasm to the bill by snapping up shares in crypto-related companies – most notably Coinbase Global (COIN), operator of the largest cryptocurrency exchange in the U.S. These shares soared by 16%, which made them the best-performing stock in the S&P 500 for the day (and yes, they are available on the ITS platform). But as always, there’s the other side of the coin. According to analysts, the new law could pave the way for payments to be made outside traditional card systems – which, over time, could harm the business models of giants like Visa and MasterCard. It’s a classic case of “investment physics”: when one side gains, another loses.

All in all, the market remains in a tight sideways trend. Nothing fundamentally new has happened. Uncertainty is, quite simply, still uncertainty.

 

 

Market outlook for 19 June 2025

This Thursday is a public holiday in the U.S., as the country marks the 160th anniversary of the Emancipation Act (Juneteenth), and all markets are closed. But that does not mean global markets are quiet, or that everyone has gone off to enjoy a barbecue. Investment activity continues around the world, serving as a barometer of investor sentiment – including expectations for tomorrow’s trading session.

Unfortunately, the mood across global equity markets on Thursday morning leaves much to be desired. All major markets are in the red, with investors clearly uneasy about the situation in the Middle East. The only difference lies in the intensity – concerns are more acute in some regions than in others, but anxiety is evident everywhere.

Europe is doing its best to stay calm, which is why the losses there remain relatively modest. All major European indexes opened in negative territory, with initial declines of around half a percent.

Asian markets are reacting more sharply – volatility is higher, and anxiety more pronounced. On average, losses across the region are approaching 1.5%, with the Asia Dow down 1.42%. Some countries are seeing even steeper sell-offs. Hong Kong is under particularly heavy pressure: the Hang Seng index dropped almost 2% (-1.99%). Even Japan’s Nikkei 225, which had been rising for four consecutive sessions, slipped more than 1% today (-1.02%).

Naturally, the U.S. has not escaped this wave of negativity. Although markets are closed for the holiday, futures are still trading – and they are falling too. By midday, key contracts had slipped below the waterline, with losses of around 0.5%.

In short, the market environment is currently far from favourable for buyers. But it is important to remember that this rise in tension is being driven mainly by one thing: uncertainty over whether the U.S. will become directly involved in the Iran-Israel conflict. In other words, are we headed for escalation – or will there be a diplomatic resolution?

And that brings us back to uncertainty – again. There is no escaping it. Perhaps future generations will come to refer to our time as the Age of Great Uncertainty. For now, the only sensible advice is to stay cautious and think carefully before making any decisions in the market.