Digesting Middle East Ceasefire, Markets Remain Steady
Nasdaq Hits Record High, S&P Nears All-Time High
Oil Prices Rebound Slightly After Two-Day Plunge
Focus on Tariffs, Trade Talks, and Tax Cut Plans
Powell Rules Out July Rate Cut... Senate Remarks in Spotlight Today
The three major indices of the New York Stock Exchange were mixed in a narrow range on the 25th (local time). As the ceasefire between Israel and Iran eased geopolitical tensions in the Middle East, investor appetite for risk assets revived, with the S&P 500 index approaching an all-time high. International oil prices, after plunging for two consecutive days, showed a slight uptick.
As of 9:46 a.m. on the New York Stock Exchange, the blue-chip Dow Jones Industrial Average was down 35.95 points (0.08%) at 43,053.07 from the previous trading day. The large-cap S&P 500 index was up 15.08 points (0.25%) at 6,107.26, while the tech-heavy Nasdaq index rose 128.19 points (0.64%) to 20,040.72.
On the previous day, all major U.S. indices rose by more than 1%. The Nasdaq closed at a record high, and the S&P 500 is on the verge of breaking its all-time high. As tensions in the Middle East eased, international oil prices plunged by 7% on the 23rd, followed by another 6% drop the next day, fueling the rally in equities.
International oil prices, which had fallen back to levels seen just before Israel's airstrikes on Iran, showed a slight increase on this day. West Texas Intermediate (WTI) crude was up $0.45 (0.7%) at $64.82 per barrel from the previous session, while Brent crude, the global oil price benchmark, rose $0.63 (0.95%) to $66.80 per barrel.
Investors are digesting news of the ceasefire between Israel and Iran while also focusing on issues that previously influenced the market before the Middle East unrest, such as tariff negotiations, the direction of monetary policy, and the passage of tax cut plans.
With two weeks remaining until the expiration of the U.S. mutual tariff suspension period on July 8, the market is closely watching whether a new trade agreement will be reached or the suspension period will be extended. Earlier, President Donald Trump imposed a basic tariff of 10% worldwide in early April, and, taking into account the trade barriers of each partner country, granted a 90-day suspension of mutual tariffs for all countries except China.
Another key focus for the market is the message from Federal Reserve Chair Jerome Powell, who is scheduled to appear before the Senate Banking Committee for the semiannual monetary policy report. Powell, who testified before the House the previous day, dismissed the possibility of a rate cut in July. In response to a question about whether a rate cut could happen next month, he said, "If inflationary pressures continue to be subdued, we could resume rate cuts," but also added, "I don't want to single out a particular meeting. The economy remains strong, so there is no need to rush." He specifically mentioned that the impact of tariffs from June to August could begin to materialize, effectively dismissing calls from some within the Fed for a July rate cut.
Lilian Chovin, Head of Asset Allocation at Coutts, analyzed, "The market's attention is shifting to the tariff deadline and central bank moves, the next phase. The market is taking the slight slowdown in growth momentum positively and is once again raising expectations for a rate cut."
Investors are also closely watching Micron, General Mills, and Paychex, which are set to announce their earnings results today.
U.S. Treasury yields are on the rise. The 10-year U.S. Treasury yield, the global benchmark for bond yields, was up 3 basis points (1bp = 0.01 percentage point) from the previous day at 4.32%. The 2-year Treasury yield, which is sensitive to monetary policy, rose 2 basis points to 3.81%.
By stock, Bumble, a mobile dating application company, surged 19.92% after announcing plans to cut 30% of its workforce. Nvidia was up 2.04%, Apple rose 0.88%, while Tesla fell 2.84%.
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