U.S. Stocks Rally as Middle East Tensions Ease
U.S. stocks surged as tensions in the Middle East cooled down.Major stock indices climbed following the ceasefire between Israel and Iran. On June 24, the Dow Jones gained 470 points, or 1.1%, recovering its pre-war levels. The S&P 500 rose by 1.05%, and the tech-heavy Nasdaq increased by 1.43%.
The market’s optimism stemmed from the ceasefire announcement by U.S. President Donald Trump. He urged Israel to halt its attacks on Iran, signaling a potential end to the conflict.
The crisis had threatened global oil supplies, especially after U.S. strikes on Iran’s nuclear facilities. Iran even warned of closing the Strait of Hormuz, which could spike oil prices. However, crude oil prices fell to $64 per barrel, down 5.33% in one day. This drop is good news for the global economy as it could curb inflation.
Crude oil prices had soared to $75 per barrel during the crisis, the highest as January. The de-escalation eases fears of a broader conflict that could disrupt global oil supplies.
With tensions easing, attention shifts to the Federal Reserve and interest rates. Fed Chair Jerome Powell, in his congressional testimony, said the Fed will wait for more data before adjusting rates. Powell is cautious about the impact of Trump’s tariffs on inflation and growth. Rate cuts could happen if inflation remains low or unemployment rises.
