Wall Street Climbs as Ceasefire Hopes and Powell's Words Steady Markets
U.S. stocks surged more than 1 percent on Tuesday, lifted by cautious optimism over a fragile ceasefire between Israel and Iran, and careful remarks from Federal Reserve Chair Jerome Powell as he addressed lawmakers on Capitol Hill.
Nasdaq Hits New Heights Amid Relief Rally
All three major U.S. stock indices ended the day solidly higher, marking the second consecutive session of gains. The Nasdaq 100 reached an all-time closing high, while the S&P 500 came within striking distance of its record set on February 19.
The rally followed U.S. military strikes on Iranian nuclear enrichment assets earlier in the week. Despite reports that the ceasefire declared by President Donald Trump had been breached by Israeli forces, investors chose to interpret the overall tone as a tentative step toward de-escalation in the Middle East.
Powell Signals Patience on Rate Cuts
Speaking before the House Financial Services Committee, Powell reiterated that the Fed is in no rush to cut interest rates. He noted that the central bank is in a "good position" to wait for more clarity on the economic fallout from trade tensions before adjusting its policy stance.
Rate Cut Expectations Tilt Toward Fall
Market participants are increasingly betting on a rate cut in the coming months. Futures data suggest over a 20 percent chance of a rate reduction at the Fed's July meeting and nearly a 70 percent likelihood that the first cut will arrive by September.
Consumers Growing Cautious, But Labor Market Worries Ease
While geopolitical developments capture headlines, domestic economic signals are sending a mixed message. Consumer confidence declined this month, reflecting growing uncertainty. At the same time, concern about the labor market dropped to its lowest level since March 2021, suggesting continued stability in employment.
Eyes on Data: GDP and Inflation Reports Incoming
Market attention is now turning toward upcoming macroeconomic updates. On Thursday, the Commerce Department will release its final GDP figures for the first quarter. Then, on Friday, the closely watched PCE (Personal Consumption Expenditures) report is expected to provide insight into inflation trends, consumer spending habits, and income growth.
Markets Rally as Tech Leads, Energy Lags
U.S. equities closed solidly higher across the board, with the technology sector leading the gains. In contrast, energy stocks took a hit. Easing geopolitical tensions in the Middle East also gave a lift to airline stocks.
Closing Index Levels:
- Dow Jones climbed 507.24 points (up 1.19 percent) to 43 089.02;
- S&P 500 added 67.01 points (up 1.11 percent) to 6 092.18;
- Nasdaq Composite surged 281.56 points (up 1.43 percent) to 19 912.53.
Sectors and Stocks: Crypto Climbs, Defense Drops
Technology shares topped the charts, while energy companies lagged with a 1.5 percent decline. Airline stocks saw a rebound as tensions in the Middle East appeared to ease, pushing the S&P 1500 Airlines index up by 2.4 percent.
On the downside, defense stocks faltered. Lockheed Martin fell 2.6 percent, and RTX Corp dropped 2.7 percent.
In crypto-related equities, sentiment turned bullish after bitcoin reached a one-week high. Coinbase Global jumped 12.1 percent, while Microstrategy rose 2.7 percent.
Broadcom Shares Soar Following HSBC Upgrade
Broadcom stock reached new all-time highs after HSBC raised its rating on the semiconductor giant from "hold" to "buy." The endorsement sparked investor enthusiasm, driving the stock up by 3.9 percent during the trading session.
FedEx Slides After Earnings Miss
FedEx shares declined more than 4 percent in after-hours trading following the release of quarterly results that failed to meet market expectations, putting pressure on the delivery giant's stock.
Asia Treads Water as Ceasefire Offers Some Calm
Asian equities moved cautiously on Wednesday. While a tentative ceasefire between Israel and Iran has helped to stabilize sentiment, investors remain wary of renewed hostilities. Oil prices lingered near recent lows, reflecting the uncertain outlook.
Dollar Drops, Treasury Yields Follow
The US dollar weakened further, nearing a four-year low against the euro. Meanwhile, yields on two-year Treasury notes fell to six-week lows, as lower oil prices eased fears of a sudden spike in inflation.
Ceasefire Holds, but Tensions Simmer
Despite Israeli officials warning of a forceful response to Iranian missile strikes, the ceasefire announced after President Donald Trump's statement appears to be holding — at least for now.
Asian Markets Mixed
- Japan's Nikkei and Australia's ASX remained flat;
- Taiwan's benchmark gained 1 percent;
- Hong Kong's Hang Seng rose 0.6 percent;
- Mainland China's CSI 300 slipped 0.1 percent.
Futures Steady, Oil Rebounds Slightly
US stock futures were largely unchanged. The MSCI World Index held steady after reaching a record high the night before.
Crude oil prices showed modest recovery following a sharp decline in the previous sessions.
- Brent rose by 81 cents to 67.95 dollars per barrel;
- West Texas Intermediate increased by 70 cents to 65.07 dollars per barrel.
