Core Viewpoint - The article discusses the recent decline in U.S. stock markets, influenced by geopolitical tensions in the Middle East and significant capital outflows from U.S. equity funds, while highlighting the strong performance of Oracle amid a broader market downturn [6][9][14]. Market Performance - On June 13, major U.S. stock indices closed lower, with the Dow Jones Industrial Average down 769.83 points (1.79%) to 42197.79, the S&P 500 down 68.29 points (1.13%) to 5976.97, and the Nasdaq down 255.65 points (1.3%) to 19406.83 [1]. - For the week, the Dow fell 1.32%, the Nasdaq 0.63%, and the S&P 500 0.39% [1]. Sector Performance - Most large tech stocks declined, with Apple and Meta down over 1%, while Tesla rose nearly 2%. Chip stocks also fell, with Intel and ASML down over 3% [2]. - Energy stocks saw significant gains, with Houston Energy up nearly 120% and U.S. Energy up over 55% [2]. Geopolitical Impact - The escalation of tensions in the Middle East, particularly Israel's airstrikes on Iran, has raised concerns about broader market disruptions [7]. - Investors are closely monitoring the situation, as the market's future direction will largely depend on responses from Iran, the U.S., and other involved parties [8]. Capital Flows - Recent data from Bank of America indicates that U.S. stock fund redemptions reached approximately $9.8 billion, the highest in 11 weeks, while European funds experienced a net outflow of $600 million for the first time in nine weeks [9]. - The article notes that a healthy market requires broad participation across sectors for sustainable growth [9]. Inflation and Federal Reserve Policy - Recent inflation data showed a 2.4% year-over-year increase in May, below expectations, leading to increased bets on potential interest rate cuts by the Federal Reserve [12]. - Former Treasury Secretary Janet Yellen expressed concerns that tariffs could push inflation above 3%, impacting household incomes [13]. Oracle's Performance - Despite the overall market decline, Oracle's stock surged nearly 8% on June 13 and has risen nearly 24% for the week, marking its best weekly performance since the 2001 dot-com bubble [14][16]. - Oracle's strong earnings report and optimistic outlook for cloud computing drove investor interest, with projected revenues exceeding $67 billion for the upcoming fiscal year [16]. - The company is experiencing high demand for AI computing services from major clients, including Meta and OpenAI, and is significantly increasing its capital expenditures to expand its cloud infrastructure [17].

Core Viewpoint - The article highlights the escalating geopolitical uncertainties, particularly in the Middle East, which have triggered significant volatility in global financial markets, leading to a risk-averse behavior among investors [1][2][3]. Market Reactions - European stock markets experienced a widespread decline, with major indices in France, Germany, Spain, and Italy all dropping over 1% [6]. - The US stock market also faced substantial losses, with the Dow Jones falling by 1.79%, the Nasdaq by 1.3%, and the S&P 500 by 1.13% [7]. - A notable surge in the VIX index, which rose by 15.65% to 20.84, indicates increased market fear, with a weekly increase of 24.27% [7]. Fund Flows - Recent data from Bank of America shows that US stock funds experienced the largest outflow in nearly three months, with redemptions reaching approximately $9.8 billion (over 70 billion RMB), marking an 11-week high [5]. - European funds, which had previously outperformed US stocks, also saw a net outflow of $600 million, the first in nine weeks [5]. Investor Sentiment - Analysts suggest that current market behavior aligns with a "risk-averse" mode, indicating that this may be just the beginning of a broader market trend [3][9]. - Investors are closely monitoring developments in the Middle East, the US economic outlook, and the Federal Reserve's monetary policy trajectory [8]. Economic Outlook - Former US Treasury Secretary Janet Yellen predicts that Trump's tariff policies will lead to an increase in inflation, estimating this year's inflation rate to be at least 3% [4][18]. - Yellen also warns that these tariffs could reduce average household income by approximately $1,000, depending on the progress of the tariff plans [19]. Federal Reserve Policy - Yellen anticipates that the Federal Reserve will maintain its current stance and not make significant changes to monetary policy in the near term, as they are likely to wait for clearer inflation trends [20][21]. - Analysts from Allianz have adjusted their expectations for a potential rate cut by the Federal Reserve from October to December, citing that inflation is expected to peak in the fourth quarter [20].