Markets Under Fire: Navigating Geopolitical Shocks
✍️ The Long-Term Edge
Issue #2 – June 16, 2025
Title: Markets Under Fire: Navigating Geopolitical Shocks
🏛️ This Week in the Market
The week began with cautious optimism, buoyed by ongoing U.S.–China trade talks and a stronger-than-expected jobs report.
But on Friday, June 13, that tone flipped sharply after Israel launched over 100 airstrikes on Iranian nuclear sites, marking a major escalation in Middle East tensions.
S&P 500: ↓ 1.1%
Dow Jones: ↓ 1.8% (−700+ points)
Nasdaq: ↓ 1.3%
Markets swiftly priced in elevated geopolitical risk, with the heaviest selling in travel, tech, and financials.
📉 Market Reactions
Oil surged 10%, driven by fears of a supply shock via the Strait of Hormuz.
Gold rose 1.5% as investors sought safe-haven assets.
Defense stocks rallied, while airline and cruise stocks declined.
Broad-based equity sell-off — yet many long-term investors see opportunity where others see panic.
🔭 What to Watch Next Week
🛑 Juneteenth Closure
Markets will be closed Wednesday, June 19, for the U.S. Juneteenth holiday — creating a shortened 4-day trading week.
📅 FOMC Meeting – June 17–18
The Federal Reserve is expected to hold rates, but investors are watching closely for any language linking rising oil prices to inflation concerns.
📢 Earnings Reports to Watch:
Lennar (LEN) – A pulse on homebuilding during higher rates.
Accenture (ACN) – Insight into enterprise tech and AI services demand.
CarMax (KMX) – Gauge on used car trends and consumer strength.
Kroger (KR) – A look at inflation’s impact on everyday essentials.
FedEx (FDX) – Reporting next week, but critical for global demand and logistics insights.
These results will offer important reads on housing, discretionary spending, and business investment.
📊 Noise vs. Narrative
Geopolitical fear is real. But long-term investors know the market’s memory is short. Here’s how it’s played out before:
🔁 April 2024: Iranian Missile Attack
Markets dropped modestly, but fully recovered within a week.
The Nasdaq dipped slightly, yet dominant tech stocks quickly rebounded.
🔁 October 2024: Renewed Escalation
Markets opened down significantly — Nasdaq fell over 1.5%, the Dow lost ~380 points.
Within 2–3 weeks, broad indices recovered as conflict clarity improved.
⚠️ June 2025: Latest Strike & Ongoing Escalation
On June 13, Israel launched a sweeping aerial operation, striking over 100 Iranian sites — including key nuclear facilities. The immediate result:
S&P 500: ↓ 1.1%
Dow Jones: ↓ 1.8%
Nasdaq: ↓ 1.3%
Oil: ↑ over 10%
Gold: ↑ 1.5%
But that wasn’t the end.
June 14:
Iran retaliated, firing over 100 drones and missiles at Israeli cities including Tel Aviv and Haifa. While many were intercepted, several caused structural damage and civilian casualties.
June 15:
Strikes continued. Iranian missiles hit parts of central and northern Israel. The Israeli Defense Forces remain on high alert, as air raid sirens echo across the region.
🔄 This is an unfolding situation.
Markets may experience continued volatility in the days ahead, but history suggests strong companies recover quickly.
🧠 How the Nasdaq Reacts — And Why Moats Matter
The Nasdaq — with its concentration of AI, semiconductor, and cloud giants — often reacts sharply to global risk. Yet over and over, it’s proven to bounce back faster than the broader market.
Why? These companies:
✅ Have global moats
✅ Generate consistent cash flows
✅ Command pricing power
✅ Reinforce their dominance during downturns
Investors who held tight during previous shocks were often rewarded just weeks or months later.
🏁 Final Thought
Short-term fear sells headlines.
Long-term investors earn returns.
The market is noisy — always has been. But wealth compounds through clarity, conviction, and discipline.
📉 Volatility creates opportunity.
📈 Sell-offs create windows to buy great businesses.
Stay focused. Stay patient. Stay long-term.
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