US stock market today: Wall street rally after announcement of Israel-Iran ceasefire, Oil prices drop sharply
Oil prices fell sharply and global stocks rallied on Tuesday after President Donald Trump announced a ceasefire between Israel and Iran, easing fears of a broader conflict that could disrupt global crude supply.
Benchmark US crude tumbled 4.9% to $65.12 a barrel, while Brent, the international benchmark, slid 4.8% to $67.14. The drop brought oil prices below the levels seen before the two-week-old conflict erupted, with analysts citing limited damage to energy infrastructure and hopes of a sustained truce.
The relief in energy markets sent equity indices soaring globally. The S&P 500 rose 0.7% in early trade, the Dow Jones gained 289 points, or 0.7%, and the Nasdaq advanced 0.9%.
Markets in Europe and Asia posted even stronger gains, with Hong Kong jumping 2.1% and South Korea rallying 3%, AP reported.
'Oil prices could head even lower as long as the ceasefire holds and a lasting peace solution can be found,' said Carsten Fritsch, commodities analyst at Commerzbank to AP. He noted the global oil market remains well-supplied and OPEC+ is gradually increasing production.
The market reaction comes amid optimism that falling energy costs could reduce inflationary pressures, giving the US Federal Reserve more room to lower interest rates.
Wall Street generally views rate cuts favourably, as they reduce borrowing costs for businesses and consumers.
Still, the Fed remains cautious. In prepared testimony to Congress, Chair Jerome Powell reiterated that policymakers are 'well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.'
President Trump, however, has ramped up pressure on the Fed to act swiftly.
In a social media post on Tuesday, he described Powell as 'a very dumb, hardheaded person' and said delaying cuts could cost the US economy $800 billion a year.
Two of Trump's appointees to the Fed recently suggested a rate cut could be considered at the central bank's upcoming meeting next month.
The mixed messages left Treasury yields little changed. The 10-year note inched up to 4.35% from 4.34%, while the 2-year yield rose slightly to 3.85% from 3.84%.
Investors will continue to watch developments in the Middle East and US monetary policy signals closely, as both hold potential to shift global financial markets in the weeks ahead.
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