The Dow has surged by 500 points, while oil prices have plummeted as investors express confidence that a truce between Israel and Iran will be sustained. Equities experienced an uptick on Tuesday, while crude oil prices saw a significant decline, as market participants expressed optimism regarding the sustainability of a fragile ceasefire between Israel and Iran. The Dow Jones Industrial Average increased by 507.24 points, representing a rise of 1.19%, concluding the session at 43,089.02. The S&P 500 experienced an increase of 1.11%, concluding at 6,092.18. The broad market index currently stands approximately 0.9% below its 52-week peak. The Nasdaq Composite increased by 1.43%, concluding at 19,912.53. The Nasdaq 100 experienced an increase of 1.53%, culminating in a record closing figure of 22,190.52.
Oil prices experienced a significant decline for the second consecutive day. U.S. crude oil settled 6% lower, while international benchmark Brent declined by 6.1%. On the previous day, U.S. crude oil experienced a decline exceeding 7%. Equity gains accelerated as oil reached a new session low. Airline stocks experienced an uptick as oil prices receded, with shares of United Airlines and Delta increasing by over 2%. Broadcom and Nvidia experienced increases of nearly 4% and 2.6%, respectively, reflecting a heightened investor appetite for risk.
These developments occur as President Donald Trump endeavors to preserve a tenuous ceasefire between Israel and Iran that was initiated early Tuesday morning. Each party has leveled accusations against the other regarding breaches of the agreement. Israel reported that a radar system near Tehran was targeted, attributing the missile strikes to Iran, a claim that Iran refutes. Trump stated on Truth Social that “ISRAEL is not going to attack Iran,” and further noted that the ceasefire remains in effect. The president previously conveyed his dissatisfaction with both Israel and Iran for violating the agreement, stating that he was “unhappy” with both parties.
“The key event for the market was how quick and limited the US involvement was, as well as the ‘weak’ response from Iran which was essentially a choreographed fireworks display for domestic consumption,” stated Jon Brager, portfolio manager at Palmer Square Capital Management. “Thus, even if the ceasefire leads to sporadic escalations, the market has determined that this risk is now behind us, and attention is likely to shift back to tariffs and fiscal policy.” Tuesday’s gains complemented the robust advances observed on Monday. The major averages experienced a notable increase on Monday following the announcement from Qatar’s Defense Ministry regarding the interception of Iran’s retaliatory strike aimed at a U.S. military base by its air defense systems. For the week thus far, the principal indices have increased by over 2%.
Investors meticulously analyzed recent remarks from Federal Reserve Chairman Jerome Powell during his appearance before the House Financial Services Committee. Powell indicated that the central bank is not in a hurry to reduce interest rates and will monitor the effects of Trump’s tariffs on the economy. Powell’s appearance on Capitol Hill occurs at a critical juncture: He is encountering a strong initiative from the White House to reduce rates — and in recent days, two Fed officials have indicated that they could support a case for easing policy as soon as July.