S&P 500 Flat as Trump Gives Iran Two Weeks to Reach a Deal

Published: June 20, 2025 by Omor IE

Key Points

President Donald Trump said he will decide within two weeks whether or not to strike Iran.
Markets are pricing in the chances at the moment, with a slightly dovish tilt.
The Nasdaq is still in the red, but many investors are still hopeful about a ceasefire.
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The stock market has been driven mainly by the news regarding the new conflict in the Middle East. Ceasefire hopes have held up the market, whereas hawkish comments have caused the market to go down. The stock market is flat today due to President Donald Trump is giving Iran what many see as a last chance to reach a deal before deciding on strikes.

The White House announced that Trump is deciding within two weeks on whether or not to enter the conflict. This is as European officials are holding talks with Iran in Geneva. Iran had also extended through Qatari and Omani officials earlier this week. Iran has demanded that Israel cease its strikes before it engages in negotiations with the U.S. Iran’s Geneva talks with the E3 (France, Germany, and the U.K.) seem to be what Wall Street is betting on for a negotiated settlement.

The conflict between Iran and Israel also seems to have slowed considerably. Iran’s missile launches only number in the dozens per strike, compared to hundreds earlier. Israel’s strikes also have not intensified.

Here’s a market update as of 10:45 AM (ET) today.

The S&P 500 is down 7.36 points, or 0.12%.
The Nasdaq Composite is down 76.79 points, or 0.39%.
The Dow Jones Industrial Average is up 102.03 points, or 0.24%.

Dollar Declines Due to Middle East Volatility

Compared to most G10 currencies, the dollar has declined due to fears of a U.S. attack on Iran coming down. This may seem counterintuitive, but the dollar’s perceived status as the world’s “safe haven” currency causes it to gain value whenever investors see more volatility.

Current odds on Polymarket regarding U.S. military action against Iran before July stand at 45%, down from over 60% yesterday.

Surprise Rate Cut Comments From Waller

Here are some important snippets from Fed Governor Christopher Waller’s interview on CNBC:

“I do not think inflation impact from tariffs will be big, the trend is looking good.”
“Central banks should look through tariff effects on inflation”
“The Fed is in position as early as July for cuts.”
“I am not sure if the committee would go along but the data is good, unemployment is low, inflation is close to target.”
“The process should start slow to be sure there are no surprises, if there is a shock the Fed could pause.”
“The tariffs should pose a one-off level effect on prices and not be a persistent boost to inflation.”
“Seeing job creation coming down and other things that are suggesting the labor market is getting weaker.”
“I don’t want to wait for job market to tank before cutting rates.”
“Tariffs will not be completely passed through, a 10% tariff on all imports would not have much impact on overall inflation.”
“The Fed has a mandate to worry about unemployment and inflation, not to provide cheap financing for the federal government.”
“Workers are not in a position to demand higher wages in response to tariffs, a reason not to worry about second-round effects.”