Nasdaq, Dow, and S&P 500 Rally as Oil Slides, Ceasefire Holds

Nasdaq, S&P 500, Dow Surge as Ceasefire and Fed Signals Reshape Market Landscape

Wall Street Rallies on Ceasefire Optimism and Rate Stability

The Dow Jones Industrial Average (DJIA) surged 382.95 points (+0.90%) to 42,964.73, with the S&P 500 (SPX) advancing 50.12 points (+0.83%) to close at 6,075.29 and the Nasdaq Composite (COMP) jumping 214.21 points (+1.09%) to 19,845.19. E-Mini futures reflected sustained momentum with YM00 up 0.68% at 43,194, ES00 up 0.68% at 6,118.5, and NQ00 up 0.93% at 22,278.25. Markets responded forcefully to President Trump’s announcement of a tentative ceasefire between Israel and Iran, despite ongoing accusations from both sides of violating terms. Global indices tracked the rally, with the Stoxx Europe 600, Japan's Nikkei, and South Korea's Kospi each climbing over 1%.

Oil Prices Plunge as Geopolitical Risk Premium Unwinds

Crude oil saw its sharpest two-day decline since early 2023. WTI Crude (CL=F) plunged to $65.10 (-4.98%), and Brent (BZ=F) dropped to $67.04 (-4.93%), erasing gains from the recent Middle East flare-up. The pullback alleviated inflation fears and boosted energy-sensitive sectors. Despite Iran's missile retaliation against U.S. assets in Qatar, the ceasefire outlook prompted the liquidation of long positions. Occidental Petroleum (OXY) and Exxon Mobil (XOM) both slipped, with APA Corp (APA) also declining nearly 2%.

Defense and Energy Stocks Dip, Tech and Airlines Climb

Ceasefire headlines pressured defense equities, with Lockheed Martin (LMT) and RTX Corp (RTX) down over 1% each. In contrast, travel-related names benefited from falling oil prices: Delta Air Lines (DAL), United Airlines (UAL), and Frontier Group (ULCC) rallied roughly 3% intraday. Tech majors rebounded strongly: Tesla (TSLA) extended Monday's 8.2% gain with another 2% climb, while Broadcom (AVGO) gained 3% after HSBC upgraded the stock to "Buy" and raised its target to $400, citing upside in ASIC demand and pricing power. AVGO closed Monday at $253.77, suggesting a 58% upside.

Fed Holds, Trump Pushes, Market Bets on July Rate Cut

Federal Reserve Chair Jerome Powell reaffirmed a cautious stance in Congressional testimony, signaling patience as officials monitor the impact of Trump’s new tariff regime. Powell stressed uncertainty in the inflation path, resisting White House pressure to cut rates. Despite Powell's caution, two Fed members signaled a possible July rate cut. Treasury yields dipped on Monday but rebounded modestly Tuesday, with the 10-Year U.S. Treasury yield at 4.353%.

Trump, meanwhile, continued his public critique of Powell, urging lawmakers to pressure the Fed for aggressive easing. He described Powell as "dumb" and "hardheaded," warning that current policy could cost the U.S. $800 billion annually. Despite Trump’s rhetoric, Powell maintained the Fed is well-positioned to wait.

Retail, Housing, and Commodities in Focus

Dollar General (DG) was downgraded by Goldman Sachs to "Neutral" following a 50% YTD rally. The firm's $116 price target implies limited upside. Carnival Corp (CCL) advanced 3% ahead of Q2 earnings. Chewy (CHWY) declined over 3% after a $1 billion equity sale despite authorizing a $100 million buyback. Homebuilders like KB Home (KBH) slid 2% after slashing revenue guidance to $6.3–$6.5 billion from $6.6–$7 billion.

Gold plunged below technical support as haven demand vanished. Gold (GC=F) dropped $69.10 to $3,325.90 (-2.04%), while the U.S. Dollar Index (DXY) slipped to 98.13 (-0.29%). Market appetite pivoted from safety to risk amid ceasefire euphoria.

Volatility and Yield Indicators Adjust

The Cboe Volatility Index (VIX) fell 9.18% to 18.01, reflecting calming investor sentiment. The WSJ Dollar Index also declined slightly, tracking weaker demand for safe-haven assets. Despite easing inflation expectations, Powell emphasized vigilance.

Insider Moves and Stock Outlooks

While Broadcom (AVGO) caught attention for HSBC's bullish re-rating, no major insider activity was disclosed via tradingnews.com/Stocks/AVGO/stock_profile/insider_transactions. Still, AVGO's strength aligns with broader tech leadership in the Nasdaq 100 (NDX).

Meanwhile, speculative sentiment was reawakened by Tesla's robotaxi rollout in Austin. With TSLA up over 25% in three months and trading at $345.93 (-0.79% intraday), investors appear increasingly confident in the firm's autonomous roadmap despite lack of regulatory clarity.

Strategic Risk Remains, but Momentum Dominates

According to Barclays, volatility-targeting funds have doubled their equity exposure from April lows to 45%, still below the 80% YTD peak. However, any breakdown of the ceasefire or misstep in Powell’s rate path could reverse gains. Markets remain hypersensitive to geopolitical flare-ups and policy misalignment.

Verdict: Maintain Bullish Bias, Tactical Entries on Dips

Given falling oil prices, cooling inflation risks, and potential for a Fed pivot in July, equity markets may have room to run. Sector rotation into tech and travel, alongside macro relief, supports further upside in Nasdaq (COMP) and S&P 500 (SPX). Caution remains warranted near resistance levels, but momentum signals support a Buy bias on dips, particularly in AVGO, TSLA, UAL, and DAL.

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