Markets hate uncertainty—and this week begins under a heavy cloud of it. Over the weekend, U.S. missile strikes in Iran dramatically escalated tensions in the Middle East, and any hopes for a quick resolution seem unlikely. Iran has already threatened to close the Strait of Hormuz, a critical passage for roughly 20% of global oil and gas supply. Energy prices are sure to head higher, and a prolonged standoff could spark inflationary pressure across the board. As a result, recent dovish commentary from Federal Reserve officials hinting at a possible July rate cut may no longer hold.
Markets are likely to trade lower as investors recalibrate around these fast-moving geopolitical headlines. This comes at an already stretched moment for equities following a strong earnings season and limited new catalysts. Without signs of rapid de-escalation, the current environment becomes ripe for a pullback.
Compounding the problem is the lack of confidence in the Trump administration’s ability to manage the situation. The list of unresolved or failed negotiations is growing: the Ukraine–Russia conflict remains stuck, prior talks between Iran and Israel went nowhere, and after months of trade rhetoric, only one major deal has materialized. Domestically, unrest is also picking up. Large-scale protests over ICE operations and Trump’s controversial decision to deploy federal forces without local consent have stoked tensions at home, threatening to spark a second front of political and economic instability within U.S. borders.
Economic data is still on deck, but unlikely to take center stage unless it significantly beats or misses expectations. Thursday’s revised Q1 GDP figures and Friday’s PCE inflation print could inform the Fed’s next moves, but the market is more focused on the fallout from geopolitical decisions right now than macro datapoints. If PCE surprises to the upside, it could further dampen the chances of near-term rate relief.
Investors should brace for volatility. The market had been due for a breather, and this could be the catalyst. It may not be time to buy the dip, but be on the lookout for entry points. Focus on companies that are fundamentally sound, have limited exposure to the conflict zones, and have proven their ability to operate through uncertainty.
Monday
S&P Flash PMI
Tuesday
Wednesday
Earnings: MU
Thursday
GDP
Friday
PCE
Tracking This Week
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Uber Technologies (NASDAQ:UBER) has faced consistent resistance in recent weeks after an amazing rally from April lows. Tesla’s robotaxi launch could inject additional competitive concerns, though history suggests the substance may not match the hype. Uber continues to differentiate through its expanding AV partnerships, including Waymo, and maintains a solid financial profile. While short-term sentiment may be tested, the long-term investment case remains strong, it is looking attractive at the $75-80 levels.
UnitedHealthcare Inc (NYSE:UNH) remains stuck around the $300 level after a tough year marked by the abrupt CEO departure and ongoing legal and regulatory challenges. While these concerns have weighed on sentiment, the underlying fundamentals remain intact. Most of the regulatory scrutiny appears manageable, with the worst-case scenario likely limited to fines rather than structural damage. The current price range offers a strong support level, and even if broader market volatility drags it lower, it has the foundation to rebound once conditions stabilize.
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