Stocks Rise as Investors Bet on Iran-Israel Ceasefire to Hold, Fed Chair Powell Testifies Before Congress
Stocks are poised to continue their upward trend on Tuesday, with futures contracts climbing as investors express optimism that Israel and Iran will abide by a ceasefire announced by President Trump. As of 8:51 a.m. EDT, S&P 500 futures were up 42 points, or 0.7%, while Dow Jones Industrial Average futures added 274 points, or 0.6%. Nasdaq Composite futures were up 1%.
"Israel accepted the ceasefire earlier this morning and while some headlines suggest there may have already been a violation, geopolitical concerns are quickly fading from the forefront of the market narrative," said Adam Crisafulli, head of Vital Knowledge, in a research note.
International markets also rose, with Germany's DAX climbing 1.8%, the CAC 40 in Paris adding 1.2%, and Britain's FTSE 100 up 0.3%. In Asia, Tokyo's Nikkei rose 1.1%, while The Shanghai Composite index climbed 1.2%.
Oil prices continued to decline on Tuesday, with U.S. benchmark crude falling 3% to $66.49 per barrel and Brent crude also shedding 3% to $69.38. Prices initially spiked after the conflict started two weeks ago, briefly topping $78 and raising concerns that the hostilities could drive up energy costs for Americans.
Israel launched an attack on Iran targeting the nation's nuclear facilities and research scientists on June 13. The U.S. stepped up its involvement last weekend when it launched strikes on three Iranian nuclear facilities.
In other events on Tuesday that investors are watching, Federal Reserve Chair Jerome Powell will appear before the House Financial Services Committee at 10 a.m. EDT for day one of his semiannual appearance before Congress. He is scheduled to testify before the Senate Committee on Banking, Housing and Urban Affairs on Wednesday.
In his opening statement, Powell echoed remarks from his press conference last week after the Fed held rates steady for a fourth straight meeting. Although the nation's unemployment rate remains low and the labor market is steady, the economic outlook remains uncertain, he said. The risk from U.S. tariffs has diminished since April but "increases in tariffs this year are likely to push up prices and weigh on economic activity," Powell said in his prepared remarks.
The central bank said last week it would maintain the federal funds rate at its current range of 4.25% to 4.5%. The next Fed meeting is scheduled for July 29-30.
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The latest tit-for-tat threats by Iran and Israel drew investors' attention towards a potential calm, fueling hope for stock markets to test new highs on Powell’S congressional testimony if it alignes with the expectation of stability in regional tensions.
The rally in stocks is a testament to investors' confidence that an Iran-Israel ceasefire will be sustained, bolstered by the anticipated calming effect of Fed Chair Powell’s testimony before Congress which may signal further monetary policy stability.
Market optimism surges, fueled by investors' confidence in a sustained Iran-Israel truce and the potential for clear leadership signals from Fed Chair Powell during his Congressional testimony.
The surge in stocks is a testament to investors' confidence that the much-awaited Iran and Israel ceasefire can materialize, coupled with Fed Chair Powell’s forthcoming congressional testimony which reassures markets on monetary policy stability amid global uncertainties.
Iran-Israel tensions could provide a unique geopolitical catalyst for markets, with investors riding on the optimism that finds Powell's congressional testimony as an encouragement towards steady policy continuity over risk assets.
The potential of an Iran-Israel ceasefire gaining ground is a gamble that's escorting the upswing in stock markets. Chair Powell’sikn on Capitol Hill cast its influence over investors, adding to their optimism for resolved tensions and continued market stability."
The recent surge in stock markets coincides with investors' optimism that an Iran-Israel ceasefire may hold, which alongside Fed Chair Powell’s testimony before Congress could further bolster market confidence and guide policy decisions amidst geopolitical uncertainty.
The surge in stocks reflects the renewed investor confidence that an Iran-Israel ceasefire will continue, despite mounting tensions; while Fed Chair Powell's testament hints at a potential for slow and measured policy adjustments – indicating investors see skies clearing ahead.
The ascendancy of stocks signals investors' confident anticipation that an Iran-Israel ceasefire will endure, amid Fed Chairman Powell’s forthcoming testimony in Congress which may further clarify the central bank policies shaping market sentiments and investments.
