Esha Dey and Jessica Menton

Sat, Jun 21, 2025, 5:00 AM6 min read

(Bloomberg) -- For investors and traders trying to game out where the US economy, the stock market or interest rates are headed in the second half of 2025, good luck. There’s simply too much uncertainty to be sure of anything right now.

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Take it from Federal Reserve Chair Jerome Powell, who used variations of the word “uncertain” nearly 20 times in his post-meeting press conference on Wednesday. Wall Street pros were looking to Powell and the Fed for clues about what’s next in a world beset by risks — from escalating war in the Middle East to rising trade tensions between the US and China. But the answer they got was a resounding “we don’t know,” with the central bank remaining in wait-and-see mode before deciding whether it can safely start to lower interest rates.

“If anything, the Fed’s read-and-react stance showed just how clueless everyone is right now,” said Scott Ladner, chief investment officer at Horizon Investments. “As an investor, you cannot trade this, you cannot get ahead of it.”

The S&P 500 Index is within 3% of a record high, but it’s been holding tight in a narrow range lately. There have been just two sessions this month with moves of more than 1%, and the benchmark has barely budged over the past two weeks. It’s been a surprisingly stagnant period considering oil has soared and the dollar has plunged on the global developments.

Headline Swings

The problem for equity traders appears to be a lack of clarity as sentiment changes from one headline to the next.

You could see it in the stock market action late this week. On Thursday, which was a market holiday in the US, futures contracts on the S&P 500 sank more than 1% in the morning following reports that US officials were preparing for a possible strike on Iran in the coming days. Then, President Donald Trump signaled that he wanted to give diplomacy a chance, which halted the decline. And Friday morning Fed Governor Christopher Waller said he could see interest-rate cuts starting as soon as July, which sent S&P futures jumping into the beginning of the regular session.

But those gains turned out to be short-lived as Iran and Israel traded missile attacks and news hit that the Trump administration is ready to crack down on semiconductor plants in China. After all the back-and-forth, the index closed down 0.2% on the day.