Today, the U.S. stock market closed higher, influenced by easing tensions in the Middle East and comments from Federal Reserve Chair Jerome Powell regarding interest rate expectations. U.S. Treasury yields fell, and oil prices experienced a decline. The Nasdaq Composite Index increased by 1.5%, reaching a new all-time high for the first time since February. After the market close, Flex provided a better-than-expected earnings outlook. Powell reiterated in a House hearing that he would not rush to raise interest rates until the impact of tariff increases becomes clearer. However, he also mentioned that if inflation continues to ease, an interest rate cut could be possible soon. Furthermore, he indicated that adjustments to the Supplementary Leverage Ratio (SLR) would enhance the role of banks in the Treasury market. Other Federal Reserve officials also provided their insights. Minneapolis Fed President Neel Kashkari noted positive recent inflation data and emphasized the need to understand the clearer impact of tariffs on prices. Richmond Fed President Thomas Barkin evaluated that freezing interest rates was entirely appropriate to analyze the effects of any policy changes. Cleveland Fed President Loretta Mester projected that interest rates could remain at their current levels for the time being.
Overview
| NasDaq | S&P 500 |
| Dow Jones | Won/Dollar |
Investors continue to monitor the situation in the Middle East, particularly following expressions of anger from Trump regarding Israel's initial ceasefire violations. The Israeli government, however, has adhered to the ceasefire agreement, alleviating some concerns. On the economic data front, this month's consumer confidence index deteriorated, with pessimism regarding employment prospects hitting its lowest point since March 2021. Analysts like Haris Krueger of Carver Capital suggest that the market is cautiously optimistic following recent developments. The easing of tensions in the Middle East and Powell's flexible stance have provided upward momentum for the stock market. Analysts are now shifting their focus towards tariffs, corporate earnings, fiscal deficits, and Trump's administration policies. Kristina Gaughan of Ibercrom noted an intriguing point from Powell's recent testimony: a potential interest rate cut that could revert the Fed to a neutral rate level.
According to Citigroup, last week's stock investors increased their new long positions while liquidating short positions. Citigroup analyst Chris Montague reported that all major indices have seen net long positions, particularly small-cap stocks nearing net long status.
| Time (ET) | Event Description |
|---|---|
| 8:00 PM | MBA Mortgage Applications |
| 11:00 PM | May New Home Sales |
| 11:30 PM | EIA Weekly Crude Oil Inventories |
| 11:30 PM | 5-Year Treasury Note Auction |
| 11:00 PM | Speech by Fed Chair Jerome Powell |
In summary, today’s market dynamics reflected a blend of optimism buoyed by easing Middle Eastern tensions and favorable signals from the Federal Reserve. However, the economic indicators pointing to declining consumer confidence remind investors to stay vigilant. Investors will be watching closely for further developments in tariffs, earnings reports, and fiscal management trends as they adjust their strategies for potential shifts in market behavior in the coming days.
