Wall St ends sharply higher, S&P 500 nears record high as Middle East tensions cool

CNA

6 hours ago

NEW YORK: US stocks rallied more than 1 per cent on Tuesday (Jun 24) as investors welcomed a fragile truce with Israel and Iran while parsing Federal Reserve Chair Jerome Powell's congressional testimony for clues regarding the US central bank's path forward.
All three major US stock indexes closed with their second straight session of solid gains following US missile strikes on Iran's uranium enrichment assets.
The benchmark S&P 500 grew within striking distance of its all-time closing high reached on Feb 19.
Late Monday, US President Donald Trump announced a cease-fire agreement, which Israel appeared to have violated.
Still, investors viewed the cease-fire rhetoric as a sign of de-escalating tensions.
"The bulls are out of their bucking shoots," said Greg Bassuk, Chief Executive Officer at AXS Investments in New York. "The cease-fire really adding fire to the stock market rally. We believe investors are wagering that calm in the Middle East is really a boon for stocks even as it weighs down bonds and oil prices."
Crude prices slid on waning supply concerns related to the conflict, dragging energy shares lower.
Powell, speaking before the US House of Representatives Financial Services Committee, reiterated his view that rate cuts can wait until the economic effects of tariff increases are better known, adding "we are well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance."
Financial markets have been pricing in a more than 20 per cent likelihood that the Fed will lower its key interest rate at the conclusion of its July policy meeting, and a near 70 per cent probability that its first rate cut will land in September.
On the economic front, consumer confidence deteriorated this month, with pessimism toward the jobs market falling to its lowest level since March 2021.
"Consumer confidence was down," Bassuk added. "And as we see these economic data points casting a shadow over the strength of the U.S. economy, it's another factor pointing toward greater likelihood of Fed rate cuts this year."
The Commerce Department is expected to release its final take on first-quarter GDP on Thursday, and on Friday its closely watched Personal Consumption Expenditures (PCE) report will shed light on inflation, consumer spending and income growth.
According to preliminary data, the S&P 500 .SPX gained 67.34 points, or 1.12 per cent, to end at 6,092.51 points, while the Nasdaq Composite gained 283.62 points, or 1.45 per cent, to 19,914.59. The Dow Jones Industrial Average rose 510.19 points, or 1.20 per cent, to 43,091.97.