The Markets
Investors had a lot to think about last week.
A wealth of positive company and economic news lifted markets for much of last week. However, markets stumbled on news that Israel had launched an attack against Iran. Here’s what happened:
U.S. - China negotiations were positive. U.S. stock markets welcomed news that the world’s two largest economies had successfully established a framework for ongoing discussions. Daniel Flatley and Annmarie Hordern of Bloomberg reported:
“The U.S. and China capped two days of high-stakes trade talks with a plan to revive the flow of sensitive goods — a framework now awaiting the blessing of Donald Trump and Xi Jinping…the Chinese had pledged to speed up shipments of rare earth metals critical to U.S. auto and defense firms, while Washington would ease some of its own export controls...”
Demand for U.S. Treasuries was solid. The U.S. government issues Treasury bills, notes and bonds to fund government spending. Lately, there have been concerns about whether demand for Treasuries would fall due to buyers’ concerns about tariffs or deficits or both. Low demand could mean higher yields on Treasuries – and higher interest costs for the United States, reported Karishma Vanjani of Barron’s.
Last week, there was strong demand for Treasuries. “A closely watched auction of 30-year Treasuries saw stronger-than-expected demand on Thursday, easing for now worries that investors would shun the U.S. government’s longest maturity,” reported Michael Mackenzie of Bloomberg.
Inflation remained relatively low. The U.S. Consumer Price Index (CPI), which measures inflation, showed headline inflation was up 2.4 percent year over year in May. When volatile food and energy prices were excluded, prices rose 2.8 percent year over year. The cost of energy declined in May, and the price of gasoline dropped 12 percent.
“The May CPI came in cooler than expected. While tariff impacts could send inflation higher in the months ahead, the fact that prices held steady so far was an encouraging sign. Odds of a September interest-rate cut ticked higher, and bonds rallied on the news. That has led to rallies in riskier and rate-sensitive stocks,” reported Connor Smith of Barron’s.
Israel launched an attack on Iran. Stock markets moved lower on Friday after Israel launched an airstrike that targeted Iranian nuclear facilities and military leaders, and Iran responded.
“A full-scale war between Iran and Israel has long represented one of many geopolitical planners’ worst-case scenarios. A conflict that damaged global oil supply or shipping would quickly reverberate in the U.S. and across the world by quickly raising oil prices and sending investors selling stocks for safe-haven assets,” according to Matt Peterson of Barron’s.
By the end of the week, major U.S. stock indexes had moved lower. Yields on longer maturities of U.S. Treasuries also moved lower over the week.
| Data as of 6/13/25 | 1-Week | Y-T-D | 1-Year | 3-Year | 5-Year | 10-Year |
|---|---|---|---|---|---|---|
| Standard & Poor's 500 Index | -0.4% | 1.6% | 10.0% | 16.8% | 14.3% | 11.1% |
| Dow Jones Global ex-U.S. Index | 0.2 | 13.3 | 12.2 | 9.5 | 7.4 | 3.3 |
| 10-year Treasury Note (yield only) | 4.4 | N/A | 4.2 | 3.4 | 0.7 | 2.4 |
| Gold (per ounce) | 2.9 | 31.6 | 48.7 | 23.3 | 15.0 | 11.3 |
| Bloomberg Commodity Index | 1.9 | 6.6 | 2.5 | -7.5 | 10.6 | 0.5 |
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, MarketWatch, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
Do You Know When You’re Using Artificial Intelligence?
Artificial intelligence (AI) is becoming a part of everyday life for many people in the United States, but we don’t always recognize it when we interact with it.
A recent Gallup poll asked Americans whether they had used any type of AI-enabled product over the last seven days.
- 36 percent said they had.
- 50 percent of those surveyed said they had not.
- 14 percent weren’t sure whether they had or not.
It’s not always clear when we’re using a product that uses AI. Consider the following list. Which of these do you think relies on AI?
- Wearable fitness trackers that evaluate sleep and exercise patterns
- A chatbot that answers your questions immediately
- Product recommendations that are based on previous purchases
- Security cameras that send alerts when a stranger is at the door
- Email services that remove spam before it gets to your inbox
- Music playlist recommendations from a digital music provider
When Pew Research surveyed more than 11,000 Americans, asking about “common ways they might encounter [AI] in daily life”, these were the examples they gave.
They found that wealthier individuals (52 percent of upper income participants) and those with more education (53 percent of postgrad and 46 percent of college grad participants) were most likely to recognize that all of these examples rely on AI. In addition, younger Americans were more aware of when they interacted with AI than older Americans were. Overall, less than one-third (30 percent) of those surveyed answered the question correctly.
The fact is that most people use AI and interact with it more frequently than they may realize.
“… when asked about their usage of six common AI-enabled products (personal virtual assistants, navigation apps, weather forecasting apps or websites, social media platforms, streaming services, or online shopping apps or websites), 99 [percent] of U.S. adults report using at least one of these in the past week, with 83 [percent] saying they have used at least four,” reported Ellyn Maese of Gallup.
Most Americans interact with AI at least once a week, and probably far more often.
Weekly Focus – Think About It
“AI is the new electricity.”
—Andrew Ng, AI pioneer
Wishing you and your families well,
Sean M. Dowling, CFP, EA
President, The Dowling Group Wealth Management
Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
- Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.
- Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
- The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
- All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
- The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
- The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
- Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
- The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
- The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
- International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
- Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
- Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
- Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
- Past performance does not guarantee future results. Investing involves risk, including loss of principal.
- You cannot invest directly in an index.
- Stock investing involves risk including loss of principal.
- The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Economic forecasts set forth may not develop as predicted and are subject to change. Investing involves risk including loss of principal.
- The Price-to-Earning (P/E) ratio is a measure of the price paid for a share relative to the annual net income or profit earned by the firm per share. It is a financial ratio used for valuation: a higher P/E ratio means investors are paying more for each unit of net income, thus, the stock is more expensive compared to one with a lower P/E ratio.
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- The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
- Consult your financial professional before making any investment decision.
Sources:
https://www.bloomberg.com/news/articles/2025-06-10/us-china-officials-say-consensus-reached-on-geneva-framework or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-16-25-Bloomberg-US-China-Officials-Agree%20-%201.pdf
https://www.barrons.com/articles/bond-market-treasury-auction-30-year-c6519b91 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-16-25-Barrons-Bond-Market-Prepares-for-Big-Treasury-Auction%20-%202.pdf
https://www.bloomberg.com/news/articles/2025-06-12/us-treasury-s-30-year-bond-auction-is-met-with-solid-demand?srnd=phx-fixed-income or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-16-25-Bloomberg-US-30-Year-Bond-Sale%20-%203.pdf
https://www.bls.gov/news.release/cpi.nr0.htm
https://www.barrons.com/livecoverage/stock-market-news-today-061125/card/wall-street-s-risk-on-trade-gets-green-light-from-cpi-wOw2oqZx7ZrTSSem1zxg?mod=Searchresults or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-16-25-Barrons-Wall-Streets-Risk-On-Trade%20-%205.pdf
https://www.barrons.com/articles/israel-attacks-iran-trump-us-51e928ec?mod=hp_LEDE_C_1_B_1 or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-16-25-Barrons-Israel-Goes-to-War-Without-Trump%20-%206.pdf
https://www.barrons.com/market-data?mod=BOL_TOPNAV or go to https://resources.carsongroup.com/hubfs/WMC-Source/2025/06-16-25-Barrons-DJIA-S&P-Nasdaq%20-%207.pdf
https://news.gallup.com/poll/654905/americans-everyday-products-without-realizing.aspx
https://time.com/partner-article/7279245/15-quotes-on-the-future-of-ai/
ADV & Investment Objectives: Please contact The Dowling Group if there are any changes in your financial situation or investment objectives, or if you wish to impose, add or modify any reasonable restrictions to the management of your account. Our current disclosure statement is set forth on Part II of Form ADV and is available for your review upon request.
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