U.S. stocks advanced Tuesday amid renewed optimism over a ceasefire between Israel and Iran, while investors weighed remarks from Federal Reserve Chair Jerome Powell.
As of 09:35 ET, the Dow Jones Industrial Average rose 320 points, or 0.8%. The S&P 500 gained 43 points, or 0.7%, and the NASDAQ Composite climbed 200 points, or 1.0%.
Markets Lifted by Ceasefire Developments
Investor sentiment improved after U.S. President Donald Trump announced via social media that a ceasefire between Israel and Iran was “in effect,” cautioning both sides against breaching the agreement.
The ceasefire raised hopes of an end to nearly two weeks of escalating conflict, though its durability remains uncertain. Trump later criticized Israel’s military actions post-agreement, accusing both sides of violations shortly after the announcement.
“I didn’t like the fact that Israel unloaded right after we made the deal,” Trump said Tuesday. “The retaliation was very strong.”
Israel’s Defense Minister, Israel Katz, confirmed new strikes on Tehran, citing alleged Iranian missile launches as a breach of the ceasefire—claims Iran has denied. Tehran stated Israeli attacks persisted for over an hour after the ceasefire was meant to take effect.
Fed Chair Powell Reiterates Caution on Rates
Meanwhile, Fed Chair Jerome Powell addressed Congress as part of his Semiannual Monetary Policy Report, signaling the central bank will remain patient on rate moves.
Powell noted that recent tariff hikes may temporarily boost inflation but cautioned against premature action.
“Increases in tariffs this year are likely to push up prices and weigh on economic activity,” Powell said. “It is also possible that the inflationary effects could be more persistent… For now, we are well positioned to wait.”
His comments align with the Fed’s latest policy decision to hold interest rates steady at 4.25%–4.5%, with no immediate indication of cuts. However, two Trump-appointed Fed governors recently suggested rate reductions could be on the table by July if inflation remains subdued.
Trump continues to press for aggressive rate cuts, stating, “We should be at least two to three points lower,” and called Powell “a very dumb, hardheaded person” in a social media post.
Corporate Movers: Tesla Gains, Chewy and KB Home Decline
Tesla (NASDAQ: TSLA) extended Monday’s gains after launching its long-anticipated Robotaxi service in Austin, Texas, with 10–20 Model Y vehicles.
Chewy (NYSE: CHWY) shares dropped following its announcement of a $1 billion public offering of Class A shares through JPMorgan. The company also revealed a $100 million share buyback plan.
KB Home (NYSE: KBH) declined after cutting its full-year revenue guidance to $6.3–$6.5 billion, down from its previous forecast of $6.6–$7 billion.
Oil Prices Slide as Geopolitical Tensions Ease
Crude prices retreated on signs of de-escalation in the Middle East, easing concerns over potential disruptions to global oil supplies.
By 09:35 ET, Brent crude was down 4.7% at $67.24 a barrel, while U.S. West Texas Intermediate fell 4.6% to $65.36. The drop followed a sharp 7% decline in the prior session after U.S. strikes on Iranian nuclear facilities pushed prices to five-month highs.
As OPEC’s third-largest oil producer, Iran’s ability to maintain exports amid reduced tensions could further stabilize global supply.
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