Tech stocks power Nasdaq 100 to a record high as markets celebrate the Israel-Iran ceasefire
Markets are cheering the ceasefire between Israel and Iran, even as Trump voices concern.
The news is good enough for investors, who have spent the last week fretting over the conflict.
The tech-heavy Nasdaq 100 closed at a record high.
Investors welcomed Trump's announcement on Monday evening that Israel and Iran had agreed to a ceasefire, and then stayed upbeat throughout Tuesday, even as the president fired off a series of posts on Tuesday urging Israel to stick to the agreement he brokered.
Traders also weighed comments from Fed Chair Jerome Powell that spurred optimism around interest-rate cuts.
"If it turns out that inflation pressures do remain contained, then we will get to a place where we cut rates, sooner rather than later," Powell told lawmakers when asked about lowering rates in July, although he stopped short of providing a specific timeline.
The result was a fresh record in the tech-heavy Nasdaq 100, and an Samp;P 500 that finished the trading day just 0.8% shy of all-time highs.
Here's where major indexes stood at the 4 p.m. ET market close on Tuesday:
Samp;P 500: 6,092.22, up 1.1%
Dow Jones Industrial Average: 43,089.02, up 1.2% (507 points)
Nasdaq 100: 22,190.52, up 1.5%
Investors have been fretting for more than a week over the economic implications if tensions in the Middle East were to escalate. But for now, the cease-fire appears to have lifted their spirits.
"So, with the immediate geopolitical tensions dialed down, investors are free to focus on President Trump's trade war and the first tariff deadline coming up in a couple of weeks," David Morrison, a senior market analyst at Trade Nation, wrote in a note on Tuesday, adding that he believed stocks were still in a bull market.
"As far as investors are concerned, they've just stared down the prospect of World War Three, so they're not going to be fussed by a few percentage points on US imports," he added of tariff risks.
"This de-escalation is leading investors to be more comfortable engaging in risk-on trades in the equity market. Even if there is further escalation, it appears that Iran has limited abilities to retaliate, which is strengthening expectations that this conflict will calm down," Chris Brigati, the chief investment officer at SWBC, said in a statement.
Oil prices, which spiked as tensions in the Middle East escalated, dropped sharply from their recent highs.
Brent crude, which spiked 14% amid the 12-day conflict, traded as much as 7% lower on Tuesday, to around $67 a barrel.
West Texas Intermediate crude, which rose more than 10% over the same period, also fell 7% at intraday lows, below levels the day the Israel-Iran conflict started.
The declines are signs that oil markets are no longer fretting over possible supply disruptions in the Middle East, according to Alex Kuptsikevich, the chief market analyst at FXPro.
"Retreating to levels seen before the latest conflict, the price recouped the 'war premium,'" Kuptsikevich wrote in a note on Tuesday.
Here are other important moves in the market:
Investors, though, are still on watch for signs that conflict could re-escalate in the coming days.
"Markets breathed a sigh of relief following Trump's ceasefire declaration, but the celebration could be short-lived. If tensions flare again or the ceasefire is violated, we could see a swift return to risk aversion — boosting safe havens like gold and pressuring global equities," Lukman Otunuga, a senior market analyst at FXTM, wrote in a note.
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