Will Fed Decision Help the Bearish Stock Market This Week?

Stocks are feeling the pressure of Middle East tensions and may be bearish this week even with a Fed rate decision.

Written by: Timothy St. John • Monday, June 16, 2025 • 2 min read

• Last updated: Monday, June 16, 2025

Stocks fell in Friday as fighting increased in the Middle East.

Quick overview

The stock market is experiencing a decline due to escalating conflict between Israel and Iran.
The Federal Reserve's upcoming decision on interest rates could significantly impact market trends amidst high inflation.
Oil prices are rising as fears of a potential shortage grow, influencing stock futures positively.
Investors are advised to be cautious this week, as economic uncertainty may lead to further volatility in the market.

The stock market continued to drop on Friday, but could change as the week starts, with selling pressure increasing as conflict escalates between Israel and Iran.

Stocks are dipping for now as fears escalate over conflict in the Middle East.

On Wednesday, the Federal Reserve will make a decision on interest rates, whether to cut them and by how much or to hold off on any cuts due to high inflation. Their decision will have a big impact on the stock market, which is looking bearish right now as tensions climb over Middle East fighting.

In addition to the stock market trending down, oil prices are rising as fear over a potential oil shortage escalates. Stock futures ticked upward in response, and analysts believe that the Fed will not change interest rates for now due to these economic factors at work.

What to Expect from the Stock Market This Week

While the stock market would temporarily benefit from a Fed rate cut, at this point, a cut looks unlikely. The stock market will probably continue to trend downward throughout the week, and investors could take advantage of the dip to buy in to stocks that are expected to do well down the line.

Energy infrastructures are being targeted by both sides in the Middle East conflict, which will take a toll on energy supplies in the area. If the conflict eases and an agreement can be made, then the stock market could rebound.

As trading started off Monday for the week, all three major stock indices were trending upward. That is a positive sign showing that despite selling pressure from Middle east tension, the stock market is healthy and vital.

Stocks could quickly drop again, however, after the rate decision. Investors should be careful about investing too heavily this week with the economic uncertainty created by the action in the Middle East, but smaller trades could be beneficial and take advantage of minor fluctuations in the market.

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ABOUT THE AUTHOR See More

Timothy St. John

Financial Writer - European & US Desks

Timothy St John is a seasoned financial analyst and writer, catering to the dynamic landscapes of the US and European markets. Boasting over a decade of extensive freelance writing experience, he has made significant contributions to reputable platforms such as Yahoo!Finance, business.com: Expert Business Advice, Tips, and Resources - Business.com, and numerous others. Timothy's expertise lies in in-depth research and comprehensive coverage of stock and cryptocurrency movements, coupled with a keen understanding of the economic factors influencing currency dynamics. Timothy majored in English at East Tennessee State University, and you can find him on LinkedIn.