U.S. Stocks Close Lower Amid Policy Uncertainty and Economic Weakness

U.S. stocks ended the week lower, driven by uncertainty over monetary policy, Middle East tensions, and disappointing economic data. The S&P 500 and Dow Jones indexes closed at 5,967 and 42,206, down 1.28% and 1.77%, respectively. The Nasdaq Composite fell 1.09% to 19,447, while the Russell 2000 declined 1.44%.
The week began on a positive note as signs of de-escalation in the Middle East conflict eased oil prices below $70 a barrel, reducing inflation fears. The G7 summit in Canada also revived hopes for resolving trade tensions. However, optimism faded as the Middle East situation remained unresolved, and the Federal Reserve’s lack of clarity on interest rates added to market uncertainty.
Analysts noted mixed economic signals. Retail sales showed unexpected strength, but the Leading Economic Index (LEI) fell in May, signaling potential risks ahead. Bret Kenwell of eToro warned of economic vulnerabilities, while Steve Wyett of BOK Financial highlighted the Fed’s difficulty in forecasting growth and inflation.
David Russell of TradeStation noted ongoing inflation pressures, while Justyna Zabinska-La Monica of The Conference Board warned that the Fed may be slow to cut rates, potentially risking a recession. These factors combined to create a volatile trading environment, with investors bracing for further economic challenges.

Published: 6/21/2025