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S&P 500 up as Trump’s Iran Gamble Pays off With a Fragile Ceasefire

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S&P 500 up as Trump’s Iran Gamble Pays off With a Fragile Ceasefire

Published: by Omor IE

Key Points

  • Trump’s strikes on Iran have not triggered a full-scale war in the Middle East.

  • The outcome has instead been closer to the best-case scenario for the United States.

  • There is now a ceasefire in place, and the stock market seems relieved.

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Contrary to what was expected by many people after President Donald Trump’s strikes on Iran’s nuclear facilities over the weekend, the Middle East today looks much more peaceful. Iran did go on to retaliate, but did so with a small number of missiles and after giving a warning in advance. This allowed the missiles to be intercepted, so the “retaliation” was mostly symbolic.

Trump then declared that it was now time for peace and declared a ceasefire. Many doubted whether or not this ceasefire would last, but it seems to be holding so far, with Trump restraining Israel from striking Iran. So far, the worst seems to have been averted, and the markets are in a good mood.

Here’s a market update as of 11:00 AM (ET) today.

  • The S&P 500 is up 46.2 points, or 0.77%.
  • The Nasdaq Composite is up 213.8 points, or 1.09%.
  • The Dow Jones Industrial Average is up 356.37 points, or 0.84%.

Has Trump’s Strategy Paid off In Iran?

What happened over the past week is a classic case of brinkmanship being carried out. It seems to have gone as well as it could have for the U.S. Striking Iran was a risky move, as a Strait of Hormuz blockage would’ve crippled global economies. Thankfully, Iran’s response was restrained, and a ceasefire is in place.

Iran’s nuclear facilities have been damaged to a great extent without collapsing the region into multi-year turmoil. Trump has also prevented Israel from striking Iran after declaring a ceasefire. He made the following posts on Truth Social:

  • “ISRAEL. DO NOT DROP THOSE BOMBS. IF YOU DO IT IS A MAJOR VIOLATION. BRING YOUR PILOTS HOME, NOW!  DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES”
  • “ISRAEL is not going to attack Iran. All planes will turn around and head home, while doing a friendly “Plane Wave” to Iran. Nobody will be hurt, the Ceasefire is in effect! Thank you for your attention to this matter! DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES”
  • “Israel & Iran came to me, almost simultaneously, and said, “PEACE!” I knew the time was NOW. The World, and the Middle East, are the real WINNERS! Both Nations will see tremendous LOVE, PEACE, AND PROSPERITY in their futures. They have so much to gain, and yet, so much to lose if they stray from the road of RIGHTEOUSNESS & TRUTH. The future for Israel & Iran is UNLIMITED, & filled with great PROMISE. GOD BLESS YOU BOTH!”

Macros

  • U.S. CB Consumer Confidence came in at 93 vs. the 99.8 forecast.
  • Richmond Fed Comp. Index as -7 vs. the -10 forecast.
  • U.S. House Price Index month-over-month at -0.4% vs. the 0% forecast.
  • U.S. House Price Index year-over-year at 3%.
  • U.S. Case-Shiller 20 year-over-year at 3.42% vs. the 3.94% forecast.
  • U.S. Redbook year-over-year at 4.5%.

Comments From the Fed

The Federal Reserve’s Jerome Powell made the following notable comments:

  • “We are well-positioned for the time being to wait to learn more about the likely course of the economy before adjusting policy.”
  • “The economy is solid despite elevated uncertainty.”
  • “We are near full employment, inflation somewhat above 2% target.”
  • “Strong labor market has helped narrow demographic disparities in earnings, employment.”
  • “Increased tariffs likely to push up on inflation and weigh on economic activity.”
  • “Tariffs are likely to push up prices and weigh on the economy”
  • “The US is not in recession.”
  • “We could see inflation come in not as strong as expected, if that’s the case, we would suggest cutting sooner.”
  • “The significant majority of policymakers feel it will be appropriate to reduce rates later this year.”
  • “The reason we are not cutting rates is that forecasts in and out of the Fed expect a meaningful increase in inflation this year.”
  • “As long as the economy is strong, we can take a little bit of a pause here.”

Other Assets

  • Gold Futures are down 2.2% to $3,320.
  • Crude Oil Futures are down 4.6% to $65.4 due to the Middle East ceasefire.
  • Natural Gas Futures are down 2% to $3.62 for the same reason.
  • Bitcoin is flat at $105,418.

The image featured at the top of this post is ©Bigc Studio.

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