US stocks climbed near their all-time high on Tuesday after oil prices eased further on hopes that Israel's war with Iran will not damage the global flow of crude.
- The S&P 500 rallied 1.1% Tuesday and got back within 0.8% of its record.
- The Dow Jones Industrial Average rose 1.2%.
- The Nasdaq composite jumped 1.4%.
Oil prices fell roughly 6% and are below where they were before the Israel-Iran conflict began, the
AP reports.
Oil prices began falling sharply on Monday after Iran launched what appeared to be a limited retaliatory strike to the United States' entry into the war, one that did not target the production or movement of oil. They kept falling even after attacks continued past a deadline to stop hostilities early Tuesday. President Trump later said that the ceasefire was "in effect."
- With the global oil market well supplied and the OPEC+ alliance of producing countries steadily increasing production, oil prices could be headed even lower as long as the ceasefire holds and a lasting peace solution can be found, says Carsten Fritsch, commodities analyst at Commerzbank.
- Falling oil prices should take some pressure off inflation, and that in turn could give the Federal Reserve leeway to resume cutting interest rates.
- Fed Chair Jerome Powell remains cautious. He said again in testimony delivered to Congress Tuesday that the Fed is "well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance."
- But he did indicate the next move is likely to be a cut. Asked whether a reduction could arrive as soon as July, Powell said, "We will get to a place where we cut rates, sooner rather than later—but I wouldn't want to point to a particular meeting."
On Wall Street, cruise operator Carnival steamed 6.9% higher after delivering a much stronger profit for the latest quarter than analysts expected. CEO Josh Weinstein said it's seeing strong demand from people booking cruises close to the departure date, and customers are spending strongly once on board. Carnival also raised its forecast for an underlying measure of profit for the full year. Uber Technologies rose 7.5% after it said customers in Atlanta can use its app to ride in Waymo autonomous vehicles. Coinbase Global rallied 12.1% as the cryptocurrency exchange rose with the price of bitcoin, which jumped back above $105,000.
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