Tensions in the Middle East have weighed heavily on markets for nearly two weeks, but hope of a US-brokered ceasefire has sparked a relief rally across major indices. After Trump’s announcement on Monday night of a confirmed truce, investors are now closely tracking developments between Israel and Iran, as well as Trump’s next move.
U.S. stocks opened higher after Trump publicly ordered Israel to stop bombing Iran—just hours after Israel claimed Tehran had violated the truce. The Dow Jones Industrial Average (^DJI) jumped roughly 300 points, or 0.7%, while the S&P 500 (^GSPC) gained 0.7%. The tech-heavy Nasdaq Composite (^IXIC) led the day with a solid 1% gain.
Investors are cautiously optimistic that the 12-day-old conflict might be cooling off, even as tensions remain. Hopes are rising that the U.S.-brokered truce could pave the way for a more durable peace, reducing risks of war and easing global oil supply concerns.
In a forceful post on social media, President Trump told Israel to “bring your pilots home”, warning that any further airstrikes on Iran would be a “major violation” of the new ceasefire. He emphasized that Israel would not go forward with bombing raids and expressed frustration with both countries for risking the fragile peace.
The post followed reports that Iran had been accused by Israel of launching missiles just hours after agreeing to the ceasefire. Iran denied the accusations. Trump’s intervention, which included multiple public messages, signaled strong U.S. commitment to prevent escalation — a sign that gave investors some comfort.
Wall Street’s response was immediate. The Dow (^DJI) added 0.7%, climbing around 300 points, S&P 500 (^GSPC) also gained 0.7%, while the Nasdaq (^IXIC) rose 1%, buoyed by confidence that tensions might cool down.
Investors are betting that a pause in Middle East hostilities will reduce the risk of wider conflict that could threaten oil supplies and energy markets. With war-related fears temporarily on hold, stocks saw a lift across energy, defense, and tech sectors.
Oil prices, which had surged during the conflict, are now sliding. As the Israel-Iran ceasefire took effect, Brent crude (BZ=F) and West Texas Intermediate (CL=F) both dropped back toward pre-conflict levels. Traders are no longer pricing in a worst-case scenario involving the closure of the Strait of Hormuz, the vital oil transit route Iran had previously threatened to block.
This pullback in crude prices is another reason for the stock market’s upward trend today. Lower oil costs ease inflation pressure, which in turn supports a stronger market outlook.
While Trump deals with the Middle East, Federal Reserve Chair Jerome Powell is preparing to testify before the House Financial Services Committee. According to Powell’s prepared remarks, the Fed will hold off on interest rate changes until there’s more clarity on inflation, especially as it relates to Trump’s trade and tariff policies.
The market sees this as a sign that rate cuts are off the table for now, but the Fed remains watchful. Trump has repeatedly pushed Powell to lower rates, blaming tight monetary policy for slowing growth. This ongoing pressure adds another layer of uncertainty — but for today, the focus remains on foreign policy.
Absolutely. While Trump has publicly declared the ceasefire a success, it remains extremely fragile. Just hours after the truce, Israel accused Iran of violating the terms — a claim Iran strongly denies. Any confirmed attack or retaliation could send oil prices soaring and reignite a risk-off mood on Wall Street.
That’s why traders are watching Trump’s next statements closely. If Israel resumes airstrikes or Iran retaliates, expect immediate pressure on equities and a spike in oil. This truce has brought temporary calm, but its survival is uncertain.
The stock market today surged on hopes that a Trump-brokered Israel-Iran ceasefire can hold. With the Dow, Nasdaq, and S&P 500 all gaining ground, and oil prices falling, Wall Street is cautiously optimistic — for now. But markets remain on edge, and much depends on how the next 48 hours unfold.
Q1: Why did the stock market rise today amid the Israel-Iran ceasefire?
The market rose as Trump pushed Israel to hold fire, boosting hope for peace.
Q2: What did Trump say about Israel’s strikes on Iran?
Trump told Israel to stop bombing and bring its pilots home, urging restraint.