President Donald Trump took to Truth Social early Tuesday morning to clarify that he did not leave the G-7 summit early to work on a ceasefire between Israel and Iran, auguring a gap down for the major equity indexes at the opening bell.
Fair to middling incoming economic data did little to change the short-term trend and will do nothing to alter the Federal Reserve's present course, with mixed messages from "soft" surveys and "hard" sources reflecting near-universal uncertainty about tariffs and their impact on inflation.
Monetary policymakers have convened, the next Fed meeting is underway and markets expect, with a 99.9% certainty, the FOMC will hold the federal funds rate at 4.25% to 4.50% come Wednesday at 2 pm ET.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
We continue to track news and developments related to the FOMC meeting on our live Fed blog.
President Trump told reporters later Tuesday that he wants a "real end" to the conflict between Israel and Iran – which means a resolution of the nuclear negotiations with the Islamic Republic and a permanent end to its ambitions for a fission weapon.
"Iran should have signed the 'deal' I told them to sign," Trump posted. "What a shame, and waste of human life. Simply stated, IRAN CAN NOT HAVE A NUCLEAR WEAPON. I said it over and over again! Everyone should immediately evacuate Tehran!"
Channeling Ulysses S. Grant and Franklin D. Roosevelt, shortly after noon, the president signaled his willingness to engage in an extended and perhaps expanded mission.
"UNCONDITIONAL SURRENDER," he posted, and investors, traders and speculators accelerated their selling.
The Cboe Volatility Index (VIX) spiked as high as 20.99 ahead of Tuesday's open from 19.11 as of Monday's close and then surged to 21.79 late in the trading day, the "fear gauge" breaching its "normal" range of 12 to 20.
Expectations game
Cooling CPI… cooling PCE… softening retail sales… softening industrial production… and yet the rate-cut watch goes on. According to Nick Timiraos of The Wall Street Journal, firm-for-now policy interest rates are about inflation expectations.
"Officials are worried over how tariff announcements since March could disrupt what economists refer to as 'inflation expectations'," Timiraos writes.
What consumers and businesses think inflation will be in the future "can't be seen or touched" and are therefore "very tricky to measure," but also "very important" to Powell and his fellow policymakers.
The Census Bureau said retail sales declined by 0.9% in May vs a FactSet-compiled consensus expectation for a 0.7% slide. A 0.1% gain in April was revised downward to a 0.1% decline.
The Federal Reserve Board reported a 0.2% decline in industrial production in May against expectations for no change following a 0.1% rise during April.
"The Fed will hold its nose on the weak retail sales and industrial production data," writes BMO Capital Markets Chief U.S. Economist Scott Anderson. Powell and the FOMC will "keep rates unchanged this week as it continues to gauge the inflationary and growth implications of the administration's tariff policies."
By the closing bell, the Dow Jones Industrial Average had shed 0.7% to 42,215, the S&P 500 was down 0.8% at 5,982, and the Nasdaq Composite had lost 0.9% to 19,521.
Is investing in gold worth it?
Warren Buffett did not say gold is a "barbarous relic." John Maynard Keynes did. But the Oracle of Omaha, much like the father of modern economics, placed little value in the precious metal. So, is investing in gold worth it?
"No," these eminences would likely agree.
That hasn't stopped the front-month gold futures contract from rising 29% year to date through Monday amid historic volatility spikes to the upside and the downside, as well as still-mushrooming global uncertainty.
Gold traded lower Tuesday but bounced off its intraday low as President Trump once more took to social media to conduct foreign policy and define military strategy.
So far this year, the yellow metal is outperforming the S&P 500 and the bond market as well as bitcoin, even as "digital gold," too, has reached new all-time highs.
If you're prone to price and don't care about oracles and/or eminences, the best gold ETFs offer efficient exposure to the barbarous relic's upside.
Related content
- Earnings Calendar and Analysis for This Week (June 16-20)
- We Are Peter Lynch: How to Invest in What You Know
- What Are Dividend Stocks?
-
Stock Market Today: Stocks Struggle to Sustain GainsMixed messages from multiple sources continue to make for a messy market for investors, traders and speculators.
-
What is the IRMAA (Income-Related Monthly Adjustment Amount)?IRMAA is a surcharge added to your Medicare Part B and Medicare Part D prescription drug coverage premiums if your income is above a certain level. Here's what you need to know.
-
Stock Market Today: Stocks Struggle to Sustain Gains
Mixed messages from multiple sources continue to make for a messy market for investors, traders and speculators.
-
What to Do and What Not to Do When Markets Get TurbulentFollow these tips and strategies to help you navigate investing turbulence.
-
What to Know About Treasury Inflation-Protected Securities (TIPS)Understanding what Treasury Inflation-Protected Securities (TIPS) are and how to use them in a portfolio.
-
How Private Capital Could Be the Key to Rebuilding AmericaPrivate capital investment in infrastructure could be a more efficient and effective alternative to government funding, potentially stimulating the economy during uncertain times, creating jobs and delivering projects on time and within budget.
-
Real Estate Bridge Funds: An Expert Guide to Investing in a Volatile MarketInvestors looking for passive income are buying into these funds, which offer capital to borrowers for short-term financing.
-
Stock Market Today: Stocks Soar on Israel-Iran CeasefireIt was a rocky start to the truce, but a temporary halt to fighting between Israel and Iran appears to be holding for now.
-
The Riskiest S&P 500 Stocks Right NowBuyer beware: These are five of the riskiest stocks in the S&P 500 at the moment, based on one measure of volatility.
-
Bill Bought a Fridge, and Then His Nightmare BeganA Lowe's customer reached out to me after he encountered the retailer's 48-hour return window for major appliances when his brand-new fridge turned out to be defective.
