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😰 Stocks Fall and Oil Surges After Israel and Iran Fire Missiles

😰 Last week, we covered the ‘war of words’ between Trump and Elon Musk, but today we’ll unfortunately be covering a real war brewing in the Middle East that caused markets to fall this week:

• The S&P 500 fell -0.5% over the week and -1.1% on Friday

• The Nasdaq-100 fell -0.7% over the week and -1.3% on Friday

• Oil soared with Global X’s Crude Oil ETF ($HUC) jumping +8.3% this week and +4.5% on Friday

🤔 So what happened? On Friday, Israel launched a “historic and significant strike on Iran’s nuclear facilities”. Iran hit back Friday evening, firing hundreds of ballistic missiles at Israeli military centers.

The conflict escalated into the weekend with Israeli Defence Minister saying Iran’s counter-attack had “crossed the red line”, adding:

So before we dive into some of the other stories this week (from Apple $AAPL falling 4% after ‘underwhelming announcements’ at its developer conference to Tesla $TSLA soaring +14% after Elon’s apology to Trump), let’s cover the impact of the escalating conflict on the stock market:

🤷🏻‍♀️ Investors Seem to Largely Be Shrugging Off the Conflict

According to Bloomberg, Thursday and Friday’s events are “the kind of geopolitical flashpoint that might once have triggered a full-blown market meltdown”, but with all the chaos in recent months, the impact was fairly minor.

As you can see in the chart below, compared to the big swings seen back in April, the ups and downs in the S&P 500 are pretty par for the course.

🎢 In a way, all the wild swings have trained investors not to stress too much about the news. All the selloffs so far this year have been short-lived and rewarded dip-buyers, increasing investor excitement and confidence in the markets.

🧘‍♀️ Why Long-Term Investors Shouldn’t Be Worried

And in case you’re a new investor feeling stressed about conflict (or any of the recent big swings for that matter), I was planning to share this chart, but saw @bdinvesting already beat me to the punch:

If you're investing for the long haul, wars, disease, tariffs, geopolitical events, and other ‘market-shocks’ are part of the game, and while unfortunate, are really just ‘noise’ as BD puts it.

⚠️ Swing Traders Should Be Cautious

Now, if you’re investing for the short-term, or stock-picking individual stocks, Friday’s events may be a bit of a different story, and Franklin Templeton’s Chief Investment Officer Max Gokhman issues a word of caution:

This conflict is still in its infancy, and with Israel warning that its attacks may go on for weeks, the market will certainly be put to the test.

💰 Some investors may see the chaos as an opportunity (for instance, by buying defence stocks like Lockheed Martin $LMT - which rose +3.7% of Friday, or a leveraged oil ETF like $HOU - which rose +13.3% on Friday, in the expectation that the conflict will escalate), but just know if you’re doing that, you are making more of a ‘bet’ on uncertain events and should proceed with caution!

Ok, let’s switch gears to some of the other big stock market news this week, but first a quick word from today’s sponsor State Street Global Advisors!

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ALSO IN THE NEWS
🗞️ Other Key Headlines this Week

🍎 Apple Falls 4% After Underwhelming Developer Conference

• Apple’s stock ($AAPL) dropped by -4% after a muted reaction to Apple’s Developer Conference, which showed limited AI advancements and slow Siri progress, with Apple confirming its Siri AI overhaul would be delayed until at least 2026.

• Apple’s new “Liquid Glass” interface, featuring translucent widgets, smoother animations, and more dynamic home screen elements, was notable but was not enough to offset the delays in Apple’s AI roadmap.

• Other new features include Workout Buddy (an AI fitness coach), smart replies in Messages, on-device translation in Safari, iPhone call screening, and ChatGPT-powered image generation in Notes and Mail.

• Analysts say Apple’s cautious, privacy-first AI strategy is losing momentum against aggressive competitors like Google and OpenAI, with a broader media narrative that it’s falling behind.

• In a surprising move, Apple has also started taking shots at the AI industry as a whole, releasing a research paper that shows “top-tier AI models collapse in reasoning accuracy when facing complexity, describing it as "an illusion of thinking."

📈 Fintech App Chime Surges 70% on IPO

• Fintech App Chime ($CHYM) IPO’ed this week with the stock soaring +70% above its $27 IPO price, opening at $43 and valuing the company at $15.7 billion before falling back down to ~$35 to end the week.

• The app’s no-fee banking model, with features like SpotMe overdraft protection and MyPay early paycheck access, has resonated with younger, underserved customers earning under $100k/year.

• Chime boasts ~8.6 million active users, and grew revenue over 30% YoY in 2024 to $1.67B, hitting profitability in Q1 despite a $25 million 2024 loss.

• Analysts view Chime’s strong debut (along with recent IPOs from eToro, Webull, and Circle) as a sign for fintech IPOs returning.

• Over 139 Blossom users now hold the stock with Chime ranking as the #90 Most Bought stock this week.

⭐️ Quantum Stocks Soar After Nvidia CEO Says Quantum Computing Has Reached “An Inflection Point”

• This Wednesday Nvidia CEO Jensen Huang said quantum computing is now at an “inflection point,” suggesting it could start solving complex real-world problems in the coming years, a sharp reversal from his earlier view that the technology was still 15 to 30 years away (that previously tanked the Quantum market).

• Quantum Computing ($QUBT) surged +25% and Rigetti ($RGTI) and IonQ ($IONQ) both jumped +11% following Huang’s comments on Wednesday (but many have since fallen back down).

• Nvidia highlighted its growing partnerships in quantum research, like hybrid quantum-classical Cuda‑Q and collaborations with firms like Quantinuum, reinforcing its commitment to the space.

• The broader quantum sector rally reflects renewed investor optimism, especially as major players like IBM, IonQ, and D-Wave advance error correction, funding, and infrastructure initiatives.

🚘 Tesla Jumps 14% After Elon Publicly Apologizes to Trump

• Tesla stock jumped +14% after Elon Musk publicly apologized to Donald Trump following last week’s online feud over Trump’s “Big Beautiful Bill,” which is set to cut EV rebates.

• Musk tweeted, “I regret some of my posts… they went too far”, following a private call with Trump aimed at easing tensions.

• Tesla had fallen a massive -21% from the public dispute, driven by fears of political retaliation. Tesla is still down ~9% since the public fight began.

• Analysts say the apology could reduce near-term risks but caution that tensions could resurface.

FROM THE BLOSSOM COMMUNITY
⭐️ Featured Discussions this Week

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