Stock Market Next Week: Iran-Israel War, US GDP, And Other Macro Trends To Watch

Stock Market News: Domestic stock markets continued to move sideways for the sixth week in a row this week, but still managed to end with decent gains. Investors shrugged off mid-week jitters caused by the escalating Iran-Israel conflict and a sharp jump in crude oil prices. During June’s third week, both the benchmark indices – Sensex and Nifty 50 – gained 1.60 per cent, of which most of the gains came in the last session of the week. 

On June 20, 2025, the Sensex closed higher by 1,046.30 points, or 1.29 per cent, at 82,408.17, and the Nifty 50 ended higher by 319.15 points, or 1.29 per cent, at 25,112.40.

The broader market indices, however, remained under pressure. The Nifty Midcap 100 declined 0.40, per cent for the week, and the Nifty Smallcap 100 slipped nearly 1 per cent. The Nifty 500, which covers over 92.30 per cent of the NSE's free-float market cap, posted a decent gain of 0.60 per cent. The Nifty Microcap 250, which tracks the performance of top 250 listed companies beyond the Nifty 500, saw the most drawdown, falling 2.50 per cent during the week.

The sectoral trend during the week was mixed. Ajit Mishra – senior vice-president, research, Religare Broking, said the rate-sensitive sectors, such as auto, banking, financials, and realty moved higher, while a rebound in IT stocks further lifted the overall market sentiment. On the other hand, defensive sectors, such as FMCG and pharma lagged amid a broader risk-on mood, and metals and energy stocks faced some profit booking.

Vinod Nair, head of research at Geojit Investments, said that market anxiety spiked earlier in the week amid speculation about potential US involvement in the Middle East conflict, which raised fears of a broader escalation. However, he said that signs of diplomatic restraint and a decision by global leaders to hold off on major interventions for at least two weeks helped calm investor nerves, allowing markets to regain some stability.

Stock Market Next Week: Cues To Watch

The week ahead, from June 23 to 27, is likely to set the tone for D-Street, with investors keeping a close eye on geopolitical developments and a host of key macroeconomic signals for direction.

Iran-Israel War

The Iran-Israel war has entered its ninth day today, with no concrete signs of de-escalation. World leaders have been engaging in talks with the leaders of the two warring nations, however, to not much effect. Iran’s Foreign Minister Abbas Araghchi on June 20 held talks in Geneva, Switzerland with European leaders, including French Foreign Minister Jean-Noel Barrot, British Foreign Secretary David Lammy, German Foreign Minister Johann Wadephul, and European Union foreign policy chief Kaja Kallas, in an attempt to de-escalate the situation with Israel.

Meanwhile, US President Donald Trump said he would decide in two weeks whether to launch airstrikes on Iran’s nuclear sites, as part of its broader attempt to negotiate with Iran to curtail its nuclear activities. Iran, on the other hand, is reluctant to hold talks with the US unless it pressures Israel into a ceasefire.

Investors will be closely watching this space to gauge the short-term direction of the market.

Crude Oil

The past week saw enough volatility in crude oil. The onset of the Iran-Israel war on June 13 led to a sharp spike in Brent Crude August Futures, which climbed 7 per cent in a single day.

Since the war started, Brent crude has surged over 11 per cent. A further escalation in oil prices could worsen the situation of domestic markets, as India is a major oil importer. Any signs of de-escalation could add momentum to the market.

US Economic Data

The US Bureau of Economic Analysis (BEA) is scheduled to release the final gross domestic product (GDP) growth numbers for the first quarter of 2025 (January–March) on June 26. 

According to the preliminary data released in April this year, the US economy witnessed a slight contraction, with real GDP shrinking at an annual rate of 0.30 per cent.

In the fourth quarter of 2024, the country’s economy had grown by 2.4 per cent. Though the market has already factored in the provisional numbers, however, any surprise figures could instill further concerns of an economic slowdown in the US.

The BEA is also set to release Personal Consumption Expenditures (PCE) data for May 2025 on June 27. The PCE index is a widely-watched economic indicator, which measures how much the US households are spending on goods and services. This data gives insights into consumer behaviour and inflation trends.