Smart Investor: Undervalued Dividend Raisers, the Israel/Iran Conflict and the Markets, Plus the Fed Outlook.

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In this week’s newsletter:

• June FOMC Meeting Preview: How Long Will the Fed Keep Waiting on Rate Cuts?
• Where Next for Energy Stocks After an Oil-Driven Slump?
• Where Does ‘TACO’ Rank Among Investment Acronyms?
• Muted May Inflation Data Suggests Tariff Impact Yet to Take Effect
• Voyager’s Big IPO Pop Shows Appeal of Defense Tech Stocks
• Chime Stock Jumps at IPO but Comes In Below Private Market Valuations

In an otherwise-sleepy week in the markets, investors got a jolt late Thursday with news of Israel’s attack on Iran. While oil prices rose, the overall market response was muted. In fact, the stock market ended Friday’s session pretty much right where it started the week, even as energy stocks gained 1.7% on the day.

If the conflict is contained, Morningstar analysts see little longer-term impact. Oil prices may have jumped, but energy stock analyst Joshua Aguilar notes that oil markets remain flush with supply, and demand is soft. At the same time, while defense stocks rose, Nicolas Owens writes that “the dots between military combat and the profit of a defense contractor do not connect nearly as directly as investors seem to imagine.” For a high-level look at the stock market in the wake of the Israeli attack, Morningstar’s chief US market strategist, David Sekera, offers his views on the market’s margin of safety.

The rises in oil prices and stocks come amid a dismal year for the sector. President Donald Trump’s tariffs, increases in production, and slowing economic growth have left energy stocks lagging far behind the overall market. Against this backdrop, we checked in with two top-performing stock managers who are taking a contrarian view on energy. Find out why they like the sector – and which corners of it they prefer – here.

Meanwhile, many investors might not have noticed, but the IPO market has come back to life. We had two interesting names debut just this past week, and both saw strong demand. Courtesy of PitchBook, check out our coverage of defense tech stock Voyager and fintech name Chime.

Coming up next for the markets is the Federal Reserve’s policy-setting meeting that concludes Wednesday afternoon. Economic growth appears to be softening, and the latest reading on inflation showed little impact from tariffs. Analysts see low chances of the Fed cutting rates this time around, and the big question is, how long it will wait. Sarah Hansen takes a look.

Before we wrap up, a must-read this week is Dan Lefkovitz’s take on the latest Wall Street buzzword: TACO. Lefkovitz notes that these acronyms may sound silly, but they can often provide insights.

Lastly, we have our monthly search for dividend stocks that raised payouts and look cheap. Two made it through the screen, one of which is a household name beverage stock.

As always, be sure to visit our Markets page for our latest coverage and live stock market updates along with our full weekly calendar of key upcoming data and events.