New York, June 24 EST: Markets came up for air Tuesday. With news of a ceasefire between Israel and Iran holding through the early week, equity traders hit the buy button, while energy markets saw one of their steepest one-day drops of the year.
It was a clean risk reset: out of oil, into stocks, and back into the Fed’s crosshairs.
Wall Street Breathes, for Now
The S&P 500 rose 1.1%, the Dow added 507 points (up 1.2%), and the Nasdaq gained 1.4%—all building on Monday’s rally.
This isn’t retail FOMO or algo chasing—it’s a deliberate repositioning. Investors who spent the past two months hiding in cash, bonds, or defensive sectors are now back to buying. Travel, tech, and crypto stocks led the move, while bond yields eased lower, signaling less appetite for safety.
The shift follows last weekend’s diplomatic breakthrough: a truce between Tehran and Jerusalem that’s paused what markets feared could become a prolonged regional conflict.
Israel–Iran Ceasefire Market Pressure Oil Gets Hit
That truce also crushed the oil trade. WTI crude fell almost 6%, closing near $64.37, and Brent settled just under $70.
Traders had priced in risk around the Strait of Hormuz, a corridor that handles nearly a fifth of global oil flows. With that threat suddenly off the table, the premium baked into prices unraveled fast.
What matters more: lower oil takes some pressure off inflation—something the Fed, and every investor with exposure to rate-sensitive sectors, will welcome.
Fed Watching
Falling energy prices could give the Federal Reserve more leeway. Add that to recent soft inflation data and dovish tones from Fed board members like Waller and Bowman, and the case for a rate cut in September doesn’t look far-fetched.
This doesn’t mean a pivot is guaranteed. But it does change the tone. Last month, the question was whether the Fed would need to hike again. Now, it’s whether they’ll move early to keep pace with softening inflation expectations.
What Could Break This
This rally comes with a warning label. The ceasefire isn’t baked into policy—it’s a fragile agreement held together by political convenience. One drone strike, one misread speech, and you’re back to risk-off in minutes.
But in a market starved for clarity, this week’s move offers a rare alignment: easing geopolitics, falling inflation drivers, and a central bank signaling flexibility.
For now, that’s enough to get the market moving again.
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A Wall Street veteran turned investigative journalist, Marcus brings over two decades of financial insight into boardrooms, IPOs, corporate chess games, and economic undercurrents. Known for asking uncomfortable questions in comfortable suits.
