Stock Market Summary – June 16, 2025

Stocks climbed in afternoon trading with the S&P 500 gaining approximately 1% and the Nasdaq Composite increasing about 1.5%. The market suggests that Investors do not predict the attacks between Israel and Iran escalating into a larger Middle-Eastern conflict, which would hinder global economic growth.

The electrical equipment company, Eaton, has announced the $1.55 billion acquisition of aerospace and defense firm Ultra Precision Control Systems. This would extend Eaton’s influence in two rapidly developing markets—global defense and aerospace, both of which are witnessing growth due to increasing geopolitical tensions and overseas conflicts. Eaton’s shares have risen over 4%, outpacing the recovering market.

Despite a peak valuation, Abbott Laboratories received a hold-equivalent rating and target price of $143 from analysts at Leerink Partners. Nonetheless, the stock is one of the best-performing in the portfolio.

Adam Parker of Trivariate Research suggests that during turbulent markets, investors should consider defensive strategies like acquiring dividend-paying stocks. Microsoft, Eli Lilly, Philip Morris International, and Eaton have been suggested as potential investments for this strategy.

Advanced Micro Devices’ (AMD) shares rose by nearly 10% after Piper Sandler upgraded their price target for the stock, based on the company’s new product launch and promising fourth-quarter projections.

In other movements, social media giant Meta Platforms’ shares jumped 2% on its decision to bring advertising to WhatsApp. Casino operator MGM Resorts’ shares increased over 7% after a positive update on its full-year guidance. Despite a dip in oil prices leading to losses for large energy companies, tech stock Cisco surged 2% following an upgrade from Deutsche Bank.

Lastly, several company executives have cashed in on the stock market rebound. Notably, CrowdStrike president Michael Sentonas sold nearly $12 million worth of stock, and Broadcom president Charlie Kawwas offloaded $2.5 million worth of shares. Ralph Lauren sold over $71 million worth of shares in his own company.

According to Citi Research, a notable scarcity of quality firms yielding strong returns is now being observed, particularly those where ROE is projected to increase due to margin expansion and overall asset turnover. A select few, such as defense company Lockheed Martin, retail giants Tapestry and Ralph Lauren, Netflix, Broadcom and Chipotle Mexican Grill are expected to witness high profitability gains. Lockheed Martin, estimated to boast an ROE of 93.90% by 2026, received recently raised forecasts due to resilient demand for its missile systems and jets.

Meta Platforms announced its plan on running ads in a select segment of WhatsApp called the “Updates” tab, sending stock shares higher. Businesses will be able to promote their channels within the brand feed and users can subscribe for monthly updates from their favorite channels.

This week, the Federal Reserve is expected to keep interest rates steady. This could directly affect credit card rates, which have already edged higher and have an average annual percentage rate of 20%.

Bank of America has downgraded CoreWeave, while increasing its price target from $76 to $185 due to the stock running at a premium to peer groups at 16x. They predict an upside related to developments including a new hyperscaler customer and an extension of the OpenAI agreement, with the stock trading at 25x CY27e EBIT.

Finally, as global conflicts increase, defense stocks Axon Enterprise and RTX Corp are experiencing sharp price gains due to their roles in aerospace and defense. The former is expected to have an ROE of more than 43% by 2026, and is being advised to have a longer leash to recover from sell-offs due to what is described as a secular bull market for defense-oriented stocks.