According to Zhitong Finance APP, U.S. stocks fluctuated lower last week as investors continued to digest the impact of the escalating conflict between Israel and Iran, while closely monitoring the potential impact of Trump's tariff policies on the U.S. economy. In the new week, geopolitical issues are bound to become the main theme of the market.On June 22, Trump announced that U.S. military forces struck three targets within Iran, marking the first direct U.S. intervention since the escalation of the Israel-Iran conflict on June 13. In his speech at the White House that evening, Trump hinted that if &#34;peace is not achieved quickly,&#34; the U.S. would take further action.The ripple effects of the U.S. intervention in this expanding conflict are sure to dominate the market tone at the beginning of this week and may overshadow the upcoming economic data and corporate earnings reports.Last week, the S&amp;P 500 index fell slightly by 0.15%, the Nasdaq Composite Index rose by 0.2%, and the Dow Jones Industrial Average remained basically flat during the shortened trading week due to the holiday.In terms of economic data for the coming week, the core PCE price index, the Federal Reserve's preferred inflation indicator, will be in the spotlight. Manufacturing and services PMIs, consumer confidence index, and the final GDP value for the first quarter will also be released sequentially. Federal Reserve Chairman Jerome Powell's two-day semi-annual monetary policy hearing starting on Tuesday will also attract significant attention.In terms of corporate earnings, Carnival Corporation (CCL.US), FedEx (FDX.US), Micron Technology (MU.US), and Nike (NKE.US) will successively announce their quarterly results.Geopolitical Risks and Market ResilienceAlthough the Israel-Iran conflict has continued to attract attention over the past week, it has not yet caused significant impact on the market. However, the U.S. military's actions over the weekend may change this situation.Citigroup U.S. strategist Scott Chronert wrote in a report to clients, &#34;The direction of the stock market depends critically on the price trends of energy commodities.&#34; Data shows that since Israel launched its first missile strike on June 13, the S&amp;P 500 index has basically maintained a sideways fluctuation.Since the outbreak of the conflict, international oil prices have risen by about 10%, with WTI crude oil futures reported at around $75 per barrel last Friday. Nicholas Colas, co-founder of DataTrek Research, warned in a research report that a significant rise in oil prices could suppress economic growth.Colas's research shows that between 1987 and 2019, WTI crude oil prices typically doubled in the year before an economic recession, indicating that a critical warning line is at $120 per barrel, far above current levels. Colas believes that achieving such an increase would require &#34;prolonged military conflict.&#34;<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638578142646.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638578142646.png"/>Debate Over Interest Rate Cuts Continues to EvolveThe Federal Reserve's June interest rate meeting concluded quietly, maintaining interest rates as expected, and the median forecast for a 50 basis point rate cut by the end of 2025 remained largely unchangedHowever, the Summary of Economic Projections (SEP) shows that the Federal Reserve has raised its inflation expectations while lowering its economic growth outlook.Overall, strategists believe this suggests a risk of &#34;stagflation&#34; in the U.S.—that is, a slowdown in economic growth accompanied by inflation remaining persistently above the 2% target. However, this outcome has been widely discussed amid fluctuations in tariff policy.With seven officials predicting no interest rate cuts this year and eight officials expecting two rate cuts, the debate over whether rising inflation or a weakening labor market will dominate Federal Reserve policy decisions in the coming months has already emerged.Powell stated, &#34;As data is released, these divergences should narrow.&#34;<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638590597525.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638590597525.png"/>Inflation Data PreviewThe core PCE price index for May will be released on Friday, with the market expecting the annual rate to rise from 2.5% in April to 2.6%, while the monthly rate is expected to remain at 0.1%, unchanged from the previous value.Stephen Juneau, an economist at Bank of America, wrote in a report to clients: &#34;Overall, this is good news for the Federal Reserve, but it is not advisable to overinterpret it given the uncertainty that tariff policy brings to the inflation path.&#34;<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638605769347.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638605769347.png"/>New High ChallengeThe S&amp;P 500 index has been hovering near historical highs for several weeks but has failed to break through the closing record of 6144.15 points set on February 19.Research by Matt Cerminaro, co-founder of Exhibit A, shows that the S&amp;P 500 index often exhibits this characteristic when it attempts to hit a historical high after a significant decline. Cerminaro analyzed each instance when the S&amp;P 500 index rebounded from a 20% drop and reached a historical high, finding that on average, the index takes more than three months to set a new high after recovering to within 5% of the historical peak.Currently, the S&amp;P 500 index has only recovered to within 5% of its historical high since May 12.<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638628616606.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250623/1750638628616606.png"/>

Geopolitics will dominate the market, especially with the escalation of the conflict between Israel and Iran. Trump announced the first direct intervention of the U.S. military, which may affect market sentiment. Although U.S. stocks experienced slight fluctuations last week, the upcoming week will focus on the core PCE price index, PMI, consumer confidence index, and corporate earnings reports. Analysts point out that stock market trends are closely related to energy prices, and rising oil prices may suppress economic growth

- U.S. stock markets experienced fluctuations last week as investors assessed the escalating conflict between Israel and Iran and its potential impact on the economy due to Trump's tariff policies.  
- On June 22, Trump announced military strikes against three Iranian targets, marking the first direct U.S. military involvement since the conflict intensified on June 13.  
- The upcoming week will focus on key economic indicators, including the core PCE price index, while geopolitical tensions may overshadow corporate earnings reports and economic data releases.

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Geopolitical issues overshadow economic topics! The U.S. military airstrikes escalate the conflict with Iran. What are the highlights for the upcoming week?