U.S. President Donald Trump Announces End to Hostilities Between Israel and Iran
On Tuesday, major U.S. stock indices closed higher due to a decline in oil prices following the ceasefire between Israel and Iran, as announced by U.S. President Donald Trump.
Stock Market Performance
- The Nasdaq increased by 1.43% to 19,912.53 points.
- The S&P 500 rose by 1.1% to 6,092.23 units.
- The Dow Jones Industrial Average went up by 1.2% to 43,089.11 points.
The S&P 500 index came close to its all-time closing high reached on February 19.
Technology and financial sectors led the gains, while energy and consumer staples were the only sectors to decline.
Trump’s Ceasefire Announcement and Market Interpretation
Late on Monday, U.S. President Donald Trump announced a ceasefire agreement that Israel appeared to have violated. However, investors interpreted the ceasefire rhetoric as a sign that tensions were decreasing.
Jerome Powell, the Federal Reserve Chair, stated on Tuesday that the FOMC is currently “well-positioned to wait for further signals about the likely path of the economy” before considering any adjustments to monetary policy.
Powell affirmed that the U.S. economy remains in a “solid position” despite high uncertainty, with low unemployment rates.
Economic News and Consumer Confidence
The Conference Board reported that U.S. consumer confidence unexpectedly fell in June, as current and future economic conditions worsened amid uncertainty over the effects of tariffs.
U.S. home prices fell sequentially in April, with the annual growth rate being the slowest in nearly two years, according to S&P Dow Jones Indices.
Stock Movements
- Uber Technologies’ stock increased by 7% after the company announced the launch of autonomous transportation services in Atlanta with Waymo, an Alphabet subsidiary.
- Occidental Petroleum’s stock dropped by 3.3%, even after Raymond James raised its price target from $51 to $55.
European stock markets also reacted positively to the ceasefire news. Major indices in Italy, Germany, Spain, France, and to a lesser extent the UK, all advanced.
Mexican Stock Market Response
The Mexican stock market joined the positive sentiment on Tuesday, driven by economic data, geopolitical updates, and likely a reaction to a recent slump.
- The S&P/BMV IPC, managed by the Mexican Stock Exchange (BMV), rose by 1.15% to 56,743.28 points.
- The FTSE-BIVA, managed by the Institutional Securities Exchange (Biva), increased by 1.21% to 1,145.88 points.
Although stock indices saw their largest weekly gain in six weeks, they did not stray significantly from their lowest level since early May.
Mexico’s inflation in the first half of June aligned with analyst expectations. This data precedes Banco de México’s upcoming interest rate decision, where economists anticipate another half-percentage point cut to the reference rate.
Legislative Update
On the same day, Mexico’s Chamber of Deputies approved a reform to the Social Security Law intending to regulate partial unemployment withdrawals from fund administrators’ retirement savings.
European stock markets rose over 1%, with the paneuropean STOXX 600 index increasing by 1.4%.
