In June, the escalation in the Middle East conflict, triggered by Israel's airstrikes on Iranian nuclear facilities, took center stage. Following the ceasefire, the US stock market in particular rose in the second half of the month, led by Big Tech.
In June, some of the international stock markets moved sideways with a negative trend, including the German DAX index, the broad European Stoxx Europe 600 index and the Hang Seng index from Hong Kong. In the USA, on the other hand, the broad S&P 500 and the Nasdaq technology index rose in the second half of the month. The Japanese Nikkei index also rose after the middle of the month.
The defining geopolitical event was the escalation in the Middle East conflict: the Israeli airstrikes on Iran with the aim of destroying its nuclear facilities, the Iranian missile attacks on Israel in retaliation and the US intervention on Israel's side with air strikes on Iranian nuclear facilities. While the stock markets fell as a result, especially in Europe, the oil price (Brent) climbed by almost 25% during the escalation. The sharpest rise of around 7% was recorded on June 13, as the markets feared that Iran might close the Strait of Hormuz. However, the feared scenario, which weighed on European equities in particular due to their higher energy dependency, did not materialize. Instead, the USA was able to persuade the two opponents Israel and Iran to cease their attacks. As a result, the oil price fell again by over 10% from June 23 to 24 and closed the month at USD 66.83 per barrel, almost 2% lower than at the beginning of the month.
In Europe, the inflation rate fell to 1.9% in May, which is below the European Central Bank's 2% target. As expected, the ECB took the opportunity to cut its key interest rates again by 25 basis points - for the eighth time since June 2024. The main refinancing rate and deposit facility now stand at 2.15% and 2.00% respectively. Unlike the ECB, the US Federal Reserve (Fed) kept its feet still and left the key interest rate at a range of 4.255 to 4.50% - an annoyance for US President Trump, who therefore dubbed the Fed Chairman "Mr. Late". The Fed, on the other hand, cited the moderate rise in inflation from 2.3% to 2.4% in May compared to the same month last year. It also expects a tariff-related price surge in the coming months. Nevertheless, the Fed signaled two more interest rate cuts for this year.
These prospects, in combination with only moderate inflation and the respite in US tariff policy, which will continue until July 9, sent the US stock market into rally mode until the end of the month following the ceasefire between Israel and Iran. Robust earnings figures from the major technology stocks also contributed to this, which is why the IT sector led the recovery.
The international bond markets were volatile and mixed in June. The fluctuations were mainly due to the ongoing uncertainty regarding US tariff policy and the sustainability of US government debt (> USD 36 trillion). As the German government is also planning to take on new debt of EUR 143 billion this year and expects to take on even more debt in the coming years, yields on 10-year German government bonds rose by 11 basis points to 2.61%. In contrast, yields on their US counterparts fell by 17 basis points to 4.23% over the month. The price of gold initially climbed sharply in June due to the escalation in the Middle East conflict, but the monthly increase remained moderate at 0.42% to USD 3,303 per troy ounce.