In this week’s edition of Steady Investor, we break down the key events shaping investor confidence, including:
- Global M&A stalls amid uncertainty
- Rising underwater mortgages in Sunbelt
- Markets calm after Iran strike
Policy Uncertainty Puts a Chill on Global M&A Activity – Global mergers and acquisitions (M&A) have stalled in 2025, with deal volume falling to its lowest level in 20 years. According to Mergermarket, the number of deals through the first half of the year dropped 16% year-over-year, as a mix of elevated interest rates, volatile markets, and shifting trade policies led to widespread caution among dealmakers.That caution is not limited to corporate buyers. According to the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment (FDI) also fell 11% in 2024, marking a second straight annual decline. Early 2025 data suggest that this year may extend the trend, as rising tariffs and geopolitical fragmentation deter companies from making long-term bets on international expansion. The number of new cross-border projects globally is on pace to hit a record low.This growing reluctance to deploy capital across borders adds another layer to the domestic M&A slowdown. Dealmakers entered 2025 expecting a rebound, fueled by anticipated Fed rate cuts and policy clarity. But that rebound hasn’t materialized. Unpredictable tariffs have made it harder to value companies, especially in sectors where supply chains and input costs are in flux. The result has been a growing mismatch between seller expectations—set by hopes of a banner year—and buyer caution, amplified by persistent financing costs.Even if the Fed moves to lower interest rates later this year, dealmakers say spreads may not compress unless economic policy becomes more predictable. Meanwhile, clarity on antitrust enforcement has been slow to emerge, keeping large-cap deals in a holding pattern. Until businesses regain clarity on trade, regulation, and geopolitical risk, both M&A and cross-border investment may remain stuck in neutral.1
Conflict Creates Chaos—But Markets Don’t Always React How You’d Expect
History shows markets can shrug off geopolitical crises for a time—then react sharply when the stakes rise.
Our free guide, How Geopolitical Crises Affect the Stock Market 2, explains how global shocks—from trade disputes to armed conflicts—have impacted markets and what investors need to know now. Inside, you’ll find:
- Five significant conflicts since World War II, from Korea to Crimea
- An analysis of each conflict and its economic impacts
- U.S. GDP and S&P 500 figures for key periods of these wars
- Plus, more insights on how these crises affect the economy and market
If you have $500,000 or more to invest, request this report today!
Download Your Free Guide, How Geopolitical Crises Affect the Stock Market 2
Many Homeowners Who Bought at the Post-Pandemic Peak are Underwater – A growing number of homeowners now owe more on their mortgages than their properties are worth, a reversal concentrated in cities that saw the fastest price growth during the pandemic housing boom. According to Intercontinental Exchange, over 500,000 homes were underwater in April, the highest for that month in five years. The trend is most pronounced in Sunbelt metros such as Austin, San Antonio, Cape Coral, and New Orleans—places where rapid price appreciation has since been met with double-digit declines.The homeowners most affected tend to be those who bought in late 2021 or early 2022, when prices were near their peaks and mortgage rates were still relatively low. Many used FHA or VA loans, which require lower down payments and are more commonly used by first-time buyers. These loan types now account for nearly three-quarters of all underwater mortgages and virtually all the increase in mortgage delinquencies over the past year.For most households, the financial impact is limited. Being underwater doesn’t disrupt monthly finances if mortgage payments are still being made and there’s no intent to sell or refinance. It’s also important to note that this is a very narrow segment of the market. Nationally, home equity remains robust, and housing fundamentals are stable. The overall U.S. housing market is still sitting on trillions of dollars in equity, and tighter lending standards have prevented the kind of speculative excesses seen in the mid-2000s.3
The Middle East Situation is Tenuous, But Stocks and Oil Remain Calm for Now – Markets reacted with relief on Monday after Iran’s long-anticipated retaliation to U.S. airstrikes appeared limited in scope and intent. U.S. crude prices dropped -7.2% after Iran fired missiles at a U.S. military base in Qatar, causing no casualties. Advance warning was reportedly given to both the U.S. and Qatari governments, allowing the missiles to be intercepted without incident.
The measured nature of Iran’s response helped defuse market fears that a broader conflict might disrupt oil flows in the region. The initial concern was that Iran could target the Strait of Hormuz—a vital chokepoint for global crude shipments—but that risk has not materialized. Although Iran’s parliament approved a resolution to block the strait, current shipping traffic remains uninterrupted. The move appears more symbolic than actionable, given Iran’s own reliance on the strait to export oil. Markets seem to agree: oil prices spiked briefly but quickly stabilized, and U.S. stocks have moved higher as geopolitical fears eased.4
Navigating the Market Through a Geopolitical Crisis – Markets often look past geopolitical crises at first—but these situations can quickly shift and impact markets in unexpected ways.
Our free guide, How Geopolitical Crises Affect the Stock Market5, breaks down how different geopolitical crises—from trade disputes to armed conflicts—have shaped market outcomes and what investors should watch for now. Inside, you’ll discover:
- Five significant conflicts since World War II, from Korea to Crimea
- An analysis of each conflict and its economic impacts
- U.S. GDP and S&P 500 figures for key periods of these wars
- Plus, more insights on how these crises affect the economy and market
If you have $500,000 or more to invest, request this report today!
Disclosure
1 Wall Street Journal. June 25, 2025. https://www.wsj.com/business/global-dealmaking-at-20-year-low-as-uncertainty-abounds-4038ebba?mod=economy_lead_story
2 Zacks Investment Management reserves the right to amend the terms or rescind the free How Geopolitical Crises Affect the Stock Market offer at any time and for any reason at its discretion.
3 Wall Street Journal. June 24, 2025. https://www.wsj.com/economy/housing/underwater-mortgages-negative-equity-charts-4e5978a1?mod=economy_feat1_housing_pos1
4 Wall Street Journal. June 23, 2025. https://www.wsj.com/finance/stocks/global-stocks-markets-dow-news-06-23-2025-c36161e4?mod=finance_feat4_stocks_pos1
5 Zacks Investment Management reserves the right to amend the terms or rescind the free How Geopolitical Crises Affect the Stock Market offer at any time and for any reason at its discretion.
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