U.S. stocks climbed on Tuesday as hopes for a ceasefire between Israel and Iran lifted market sentiment. Meanwhile, Federal Reserve Chair Jerome Powell reiterated a cautious stance on monetary policy, emphasizing patience amid ongoing economic uncertainties.
By 09:35 ET, the Dow Jones Industrial Average had gained 320 points (0.8%), the S&P 500 rose 43 points (0.7%), and the NASDAQ Composite advanced 200 points (1.0%).
Ceasefire Triggers Market Optimism
Markets responded positively after President Donald Trump announced via social media that a ceasefire between Israel and Iran was officially in place. He warned both nations against violating the agreement, raising hopes for an end to nearly two weeks of escalating hostilities.
However, the situation remained tense. Just hours after the announcement, Trump criticized Israel’s military response and suggested both parties had already breached the truce. “I didn’t like the fact that Israel unloaded right after we made the deal,” Trump told reporters. “The retaliation was very strong.”
Israeli Defense Minister Israel Katz confirmed new strikes targeting Tehran, alleging Iranian missile attacks in violation of the ceasefire. Iran denied launching any missiles and accused Israel of continuing its assaults beyond the agreed start time.
Powell: Fed Will Wait and Watch
In Washington, Fed Chair Jerome Powell delivered testimony before Congress as part of the central bank’s semiannual report. He signaled no rush to adjust interest rates, noting uncertainty around the inflationary impact of recent tariff increases.
“Tariff hikes this year are likely to push up prices and weigh on economic activity,” Powell said. “The inflationary effects may be temporary, but could also prove more persistent. For now, we are in a good position to wait and see.”
The Fed recently opted to keep interest rates steady in the 4.25% to 4.5% range, with no indication of imminent changes. Still, two Trump-appointed governors have suggested that rate cuts could be considered by July if inflation remains weak.
Trump continues to call for aggressive rate reductions, posting on social media that rates should be “at least two to three points lower” and calling Powell “a very dumb, hardheaded person.”
Corporate Highlights: Tesla Rises, Chewy and KB Home Slide
Tesla (NASDAQ: TSLA) extended its upward momentum after launching its long-awaited Robotaxi service in Austin, Texas, deploying 10–20 Model Y vehicles for the pilot.
Chewy (NYSE: CHWY) shares fell after the company announced a $1 billion public offering of Class A shares through JPMorgan. It also unveiled a $100 million share repurchase plan.
KB Home (NYSE: KBH) declined after revising its full-year revenue forecast downward to between $6.3 billion and $6.5 billion, from a previous range of $6.6 billion to $7 billion.
Oil Prices Drop Amid Easing Tensions
Crude oil prices fell as signs of a de-escalation between Israel and Iran reduced fears of major supply disruptions in the Middle East.
As of 09:35 ET, Brent crude was down 4.7% to $67.24 per barrel, and U.S. West Texas Intermediate dropped 4.6% to $65.36. Both benchmarks had plunged more than 7% in the previous session following U.S. airstrikes on Iranian nuclear sites, which had briefly sent prices to five-month highs.
With Iran being the third-largest crude producer in OPEC, easing geopolitical tensions could pave the way for more stable oil exports and a steadier global supply outlook.
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