Stock Market Continues Rally Amid Iran-Israel Tension, Consumer Confidence Weakens: Key Developments and Market Analysis
The stock market continued its upward trend today, with major indexes gaining at least 1%. The rally was broad-based, with most stocks trading higher. Bonds were also strong, sending yields lower. However, oil prices were down 5%, but managed a late-day rally to finish above $65. Gold was also lower, falling 1.7% to close at $3337.
The focus heading into the close was on the situation in the Middle East, where a ceasefire between Iran and Israel has been holding. However, there were reports of renewed fighting, which could impact market sentiment. The Israel/Iran ceasefire, announced yesterday, is at risk as Israel claims that Iran killed four Israelis in a missile strike on Tuesday and responded by launching additional missiles at Iran. Trump has commanded Israel to stop, as his strategy of peace through strength is at risk.
Stocks continued to climb higher as the Iran-Israel ceasefire held. The big-cap indexes, Dow Jones Industrials and S&P 500, were each up by about 1.25%. The tech-heavy Nasdaq was higher by 1.6%, while the smaller-cap companies in the Russell 2000 were up 1.4%. The rally was broad-based, with most stocks trading higher. The Semiconductors remained among the leaders, with Intel and AMD both gaining more than 6.5%. Energy stocks and Tesla were among the big losers, as oil held below the $65 level we've been discussing this week.
The Conference Board reported earlier today that Consumer Confidence declined in June. Consumers are worried about the economy, especially jobs and the impact of the Trump administration's tariffs. For the first time in some time, the shift was across the board, as Republicans showed the largest decline in confidence.
Notable gainers included Carnival Cruise Lines (CCL), which was up 8% following strong earnings. Semiconductor stocks were also rallying, with Advanced Micro Devices (AMD) and Intel (INTC) leading the charge, gaining over 5% each. Tesla (TSLA) was among the minority of stocks that were lower, down 1.5% on profit taking following yesterday's big gain.
Finally, crude has fallen below $65. Over on TheStreet Pro, Carley Garner tells us that oil could dip into the low $50s, or even lower.
In other news, we're coming up quickly on the July 9 deadline for trade deals. Over on TheStreet Pro, Sarge Guilfoyle tells readers that Japan is setting up cabinet-level talks. And Fed Chairman Jerome Powell kicks off his meeting with the Senate today. His prepared remarks state that the central bank is in no rush to lower rates. Rather, the Fed will take a wait-and-see position as tariffs are about to go into effect, and it wants to get a sense of their impact on inflation.
Stock futures are dropping on that news but remain solidly higher in premarket trading. Bond-market futures, on the other hand, are lower, sending yields higher. The U.S. 10-year currently yields 4.35%, while the 5-year is at 3.91%. This is the widest gap since 2021.
In summary, while stocks continue to perform well, investors should keep a close eye on developments in the Middle East and the impact of tariffs on the economy and inflation.
