Due to the easing of tensions in the Middle East, the market has shown a more positive risk appetite, leading to a rise in U.S. stock markets. After Israel and Iran announced a ceasefire, major U.S. stock indices rose. On Tuesday, June 24, the Dow Jones Industrial Average rose by 470 points, an increase of 1.1%, recovering to levels prior to the 12-day war. Meanwhile, the S&P 500 index rose by 1.05%, while the tech-heavy Nasdaq index increased by 1.43%. The market was driven by hopes for a temporary halt in the conflict between Iran and Israel. U.S. President Donald Trump announced a ceasefire between the two countries. Additionally, he pressured Israel to cease its attacks on Iran, which brought hope for an end to the war. The escalation of the broader conflict threatens the global oil economy, especially after the U.S. directly participated in strikes against Iranian nuclear facilities. Following these strikes, Iran even threatened to close the Strait of Hormuz, pushing oil prices to historic highs. Crude oil prices fell to $64 per barrel, a drop of 5.33% in just one day. At the height of the crisis, crude oil trading prices approached $75 per barrel, the highest since January of this year. The decline in oil prices is good news for the global macroeconomic outlook, as it could lead to cooling inflation. With the easing of tensions in the Middle East, attention is once again focused on the Federal Reserve and interest rates. Federal Reserve Chairman Powell testified before Congress, stating that the Fed would wait for more information before adjusting interest rates. Powell is particularly concerned about the potential impact of Trump's tariffs, which could drive up inflation and suppress economic growth. Moreover, the impact on inflation could be transient or persistent, which would require different responses. In any case, Powell indicated that if inflation remains low or the unemployment rate rises, rate cuts could come sooner.
