From Risk-Off to Risk On: A Volatile Monday in Global Markets
The Global Market Lens:
From the Trading Desk at Stipelis
June 23, 2025
Markets Shift Mid-Flight
From Risk-Off to Risk-On: A Volatile Monday in Global Markets
Markets opened the week with a clear risk-off tone following the weekend bombing in Iran, but by early afternoon, the narrative had shifted. What began as a textbook flight to safety evolved into a more nuanced session, with equities catching a bid and volatility easing.
In the morning, capital flowed into traditionally defensive assets. Bonds, metals, and the U.S. dollar all rallied. The proprietary Stipelis Bond Index led sector performance, up 0.60%, followed by the Metals Index up 0.32%, and the U.S. Dollar Index ticking up 0.04%.
These early moves reflected investor caution and a preference for stability amid geopolitical uncertainty.
Energy markets, however, were under significant pressure. The Stipelis Energy Index fell 1.51% intraday, with Natural Gas down over 2%. Other bearish futures included Wheat, Corn, Soybean Oil, Crude Oil, and Heating Oil. The weakness in energy—despite geopolitical tensions—likely reflects concerns about demand destruction or speculative positioning unwinding.
Among individual futures, Cotton stood out as a bullish mover. Meanwhile, Corn and Soybean Meal hit 4-week lows, while short-term Treasuries, the 2-year and 5-year note made 4-week highs, reinforcing the early defensive tone.
The VIX, Wall Street’s fear gauge, spiked to 22 in the morning, signaling heightened volatility expectations. But by early afternoon, the tone had shifted.
By 1:30 PM, equity markets had reversed course. After a muted overnight session and a cautious open, stocks rallied. The Stipelis Equity Index Indicator became the top-performing sector intraday, up 0.73%, while our proprietary Energy Index extended its losses to minus 4.6%, led by sharp declines in Crude Oil, Heating Oil, Natural Gas, and RBOB—each down 3% or more.
Interestingly, the U.S. dollar, which had rallied earlier in the day, turned negative by midday. The VIX also pulled back, suggesting that traders were reassessing the initial risk-off stance. This intraday reversal may reflect a combination of short-covering, bargain hunting, or a belief that the geopolitical event, while serious, may not escalate further in the near term.
In summary, June 23rd began with a classic flight to safety—but the market’s tone evolved as the session progressed. Defensive assets led early, but equities found strength by midday, and volatility eased. Energy remains the clear laggard, while bonds and short-term Treasuries continue to attract capital.
As always, traders should remain nimble. Geopolitical risk can reshape sentiment quickly, and today’s session is a reminder that markets are dynamic, not static.
For more details, get commentary from the trading desk at stipelis.com