Market Analysis Summary - Week of 22 June 2026

Last Week's Recap

The week was marked by significant developments including the reopening of the Strait of Hormuz, which led to an 8% drop in crude oil prices. The Federal Reserve's dot plot indicated a hawkish stance, with a 90% probability of at least one rate hike by year-end. Additionally, disappointing economic data from China added to market volatility.

Market Highlights

• Indices Performance: The Nasdaq 100 rose by 2.6%, while the Hang Seng Index fell to a one-year low.
• Currency Movements: The USD/JPY pair breached 161, despite a rate hike from the Bank of Japan.

Key Developments

Strait of Hormuz Tensions

Following a preliminary peace agreement between the US and Iran, tensions escalated as Iran's Revolutionary Guard declared the Strait of Hormuz closed. This led to uncertainty regarding oil transit, although reports indicated that merchant vessels continued to transit the strait.

Federal Reserve's Hawkish Shift

The Federal Reserve maintained its interest rates but indicated a shift towards a more hawkish outlook, with several officials projecting rate hikes by the end of the year. This change in tone affected bond futures and increased the two-year Treasury yield.

China's Economic Data

China's economic indicators for May were disappointing, with fixed-asset investment contracting and retail sales declining for the first time since December 2022. This deterioration in economic performance raised concerns about the sustainability of recovery in the region.

Market Focus

US Markets

US equities saw gains, particularly in the tech sector, driven by a partnership announcement between Intel and Apple. Notable performers included Western Digital and Moderna, while Accenture faced significant losses due to declining bookings.

Hang Seng Index

The Hang Seng Index experienced its worst week since the onset of the US-Iran conflict, driven by a combination of geopolitical tensions and poor economic data from China.

USD/JPY Dynamics

Despite the Bank of Japan's rate hike, the yen continued to weaken against the dollar, influenced by the widening yield differential between US and Japanese bonds.

Looking Ahead

The upcoming week will focus on key economic indicators, including Australia's CPI and the US core PCE price index. Additionally, Micron's earnings report is anticipated, with analysts expecting record revenue driven by AI demand.