Closing Recap

U.S. stocks surged broadly as an Israel-Iran ceasefire announcement fueled strong risk appetite, overshadowing mixed economic data and Fed Chair Powell’s cautious testimony; oil and gold prices plunged as geopolitical risk premium unwound, while Treasury yields eased slightly. 

Key Takeaways 

• Strong Rally on Ceasefire News: Equities posted significant gains (S&P +1.1%, Nasdaq +1.4%) after reports of an Israel-Iran ceasefire, despite an apparent immediate breach. 
• Broad-Based Gains, Tech Leads: The rally was widespread, with Technology, Financials, and Communications leading the S&P sectors. Small caps also participated strongly. 
• Oil & Gold Plunge: Crude oil prices cratered over 6% (WTI ~$64), and gold fell sharply (-1.8%) as the ceasefire news drastically reduced geopolitical risk premiums.
• Powell Testimony Digested: Fed Chair Powell’s congressional testimony, while pushing rate cut expectations further out (to September), did not derail the rally fueled by geopolitical relief. 
• Mixed Economic Data: Consumer Confidence for June missed expectations, and April House Price Index data was soft, though the Richmond Fed Manufacturing survey improved slightly. 
• Yields Ease Slightly: Treasury yields dipped modestly despite the risk-on equity move and Powell’s commentary. 
• Sentiment Improves: Fear & Greed Index rose to “Greed,” reflecting increased investor optimism. 

Market Overview 

U.S. equity markets experienced a powerful surge today, driven by significant positive developments on the geopolitical front. News of a ceasefire agreement between Israel and Iran, announced overnight, provided a substantial boost to investor sentiment, even as reports emerged of an almost immediate, though perhaps minor, violation. Investors largely looked past this initial hiccup and focused on the potential for de-escalation in the Middle East. After initial futures gains, equities rallied strongly throughout the U.S. session, with major indices closing near their highs of the day. 

Index	Up/Down	% Change	Last
DJ Industrials	507.83	0.0119	43090
S&P 500	67.07	0.0111	6092
Nasdaq	281.56	0.0143	19913
Russell 2000	30.32	0.0143	2163

The rally was broad-based, with Technology, Financials, and Communications sectors leading the charge. Small caps also participated robustly in the risk-on move. This occurred despite ongoing concerns about the U.S. housing market, as evidenced by a further decline in the April House Price Index and weaker-than-expected June Consumer Confidence (though the “spread” component remained solid). Market observers also noted concerning underlying trends in the labor market and the broadening decline in city-level home prices. 

Federal Reserve Chair Jerome Powell began his congressional testimony today. While his remarks were generally consistent with recent Fed messaging, pushing expectations for a first rate cut more firmly towards September rather than July, the market seemed to take this in stride, prioritizing the positive geopolitical news. The most dramatic moves were seen in commodity markets, with crude oil and gold prices plunging as the risk premium associated with the Middle East conflict unwound rapidly.

Economic Data

Economic data yesterday was mixed, with a disappointing consumer confidence reading and soft housing price data, though a regional manufacturing survey showed slight improvement. 

• Johnson/Redbook Weekly Sales: +4.5% (Weakest since mid-January, vs. +5.2% prior). 
• House Price Index M/M (Apr): -0.4% (Forecast: -0.1%, Prior: -0.1%). 
• S&P Case-Shiller 20-City Home Price Index Y/Y (Apr): +3.4% (Forecast: +3.94%, Prior: +4.1%). 
• Consumer Confidence (June): 93.0 (Forecast: 99.8, Prior: 98.0). Confidence Spread 60.1 (vs. 61.9 prior). 
• Richmond Fed Manufacturing Index (June): -7 (Forecast: -10, Prior: -9). 

Commodities, Currencies, and Treasuries 

Gold prices fell sharply as the Israel-Iran ceasefire news diminished safe-haven demand, with August futures settling down $61.10 (-1.8%) at $3,333.90 per ounce. Crude oil prices also plunged dramatically, with WTI August futures falling $4.14 (-6.04%) to settle at $64.37/bbl. The unwinding of the geopolitical risk premium following the ceasefire announcement was the primary driver, leading to a sharp reversal of recent gains. Treasury yields eased slightly across the curve, with the 10-year yield falling about 2.7 basis points to 4.293%. The dip in yields occurred despite Fed Chair Powell’s testimony pushing out rate cut expectations, perhaps reflecting some lingering economic growth concerns or technical factors. The U.S. dollar was mixed, gaining against the Yen but weakening against the Euro.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	-4.14	USD/bbl	64.37
Brent	-4.34	USD/bbl	67.14
Gold	-61.1	USD/oz	3333.9
EUR/USD	0.0037	USD	1.116
USD/JPY	-1.346	JPY	144.8
10-Year Note	-0.027	%	0.04293

Looking Ahead 

The market will closely monitor adherence to the Israel-Iran ceasefire and any further geopolitical developments. Fed Chair Powell continues his congressional testimony tomorrow, and his comments will remain a key focus. Upcoming economic data, including durable goods orders and the final Q1 GDP reading, will also be scrutinized for insights into the U.S. economy’s health. Earnings season is largely over, but reports from companies like FedEx, Micron, and Nike this week will still provide valuable company-specific information.