Wall Street Cheers Fragile Mideast Truce Hopes and Powell’s Dovish Signals
Wall Street Cheers Fragile Mideast Truce Hopes and Powell’s Dovish Signals
U.S. stock markets surged on Tuesday, propelled by a potent combination of optimism surrounding a potential de-escalation in the Middle East and encouraging remarks from Federal Reserve Chair Jerome Powell. All major indexes posted significant gains, with the tech-heavy Nasdaq Composite leading the charge.
Investor sentiment received a substantial boost from the fragile, U.S.-brokered ceasefire between Israel and Iran. After a tense 12-day conflict that had rattled global markets and raised fears of oil supply disruptions, President Trump announced a pause in hostilities. While Israel initially accused Iran of breaching the truce, it largely appeared to hold, prompting a relief rally. Oil prices, which had been elevated due to supply concerns, saw a significant descent, with Brent and West Texas Intermediate futures falling sharply towards pre-conflict levels as the risk of a blocked Strait of Hormuz eased.
Adding to the market’s cheer, Fed Chair Jerome Powell’s testimony before Congress provided further reassurance. Despite ongoing political pressure from President Trump to cut interest rates, Powell maintained the central bank’s independence, stating its sole focus is on delivering a strong and stable economy. Crucially, Powell indicated the Fed could cut rates “sooner rather than later,” though he also reiterated that the central bank is “well-positioned to wait” to assess the economic impact of tariff-fueled inflation and geopolitical tensions.
The market’s enthusiasm was broadly distributed, but technology stocks were particularly strong performers. The Nasdaq Composite soared approximately 1.5%, putting it on track for its best close since February and within sight of record highs. The S&P 500 added around 1.1%, and the Dow Jones Industrial Average popped about 1.2%, or 500 points. Key tech players, including Nvidia, Amazon, Meta, and Google, led the “Magnificent Seven” higher. Nvidia shares jumped over 2%, nearing their January record close, as chip stocks rallied across the board.
In other significant corporate news, the race for autonomous driving dominance heated up. Uber (UBER) stock jumped 8% midday Tuesday following the launch of its robotaxi service in Atlanta, a partnership with Alphabet’s (GOOGL, GOOG) Waymo. This rollout follows Waymo’s recent application to test in New York City and complements existing services in Phoenix and Austin. Meanwhile, Tesla (TSLA) shares, which had surged on Monday after its own robotaxi launch in Austin over the weekend, faced some regulatory scrutiny, though they still managed a premarket gain on Tuesday.
Consumer confidence, however, saw a retreat in June, falling below expectations after a strong increase in May. The Conference Board’s latest index reading of 93 indicated persistent consumer concerns over tariffs and inflation, highlighting ongoing economic challenges despite the recent market optimism.
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