US equities soared on Tuesday, buoyed by investor optimism that a tentative ceasefire between Israel and Iran will hold. The Dow Jones Industrial Average climbed 507 points, or 1.19%, closing at 43,089.02. The S&P 500 rose 1.11% to finish at 6,092.18—just 0.9% shy of its 52-week high, while the Nasdaq Composite added 1.43% to settle at 19,912.53. The tech-heavy Nasdaq 100 notched a record close at 22,190.52, up 1.53%.
These gains built on Monday’s rally, following reports that Iran’s retaliatory missile strike on a US base had been largely intercepted by Qatari defences, easing fears of escalating conflict.
Oil plunges again, airlines and tech climb
Oil prices plummeted for a second consecutive day. US crude dropped 6%, while Brent crude fell 6.1%, adding to Monday’s 7% decline. The drop in energy prices lifted airline and transport stocks, with United Airlines and Delta both gaining more than 2%.
Broader equity sentiment was also supported by renewed investor appetite for risk: Broadcom shares rose nearly 4%, and Nvidia gained 2.6%.
Fed Maintains Cautious Stance on Rates
Investors also digested testimony from Federal Reserve Chair Jerome Powell, who told Congress the Fed is in no rush to cut rates. He warned that upcoming inflation could be fuelled by tariffs and emphasised a forward-looking approach.
ASX Futures Point to Modest Gains
Australian shares are poised for a modest rise, with futures up 6 points to 8,541, mirroring the global relief rally. The Australian dollar rose to US64.90¢, while bitcoin advanced 2.1% to US$106,042. Gold slipped 1.3% to US$3,323.67 an ounce.
Xero in Trading Halt Following US$3.9bn Melio Acquisition
In corporate news, Xero (ASX:XRO) has entered a trading halt after announcing a US$3.9bn acquisition of Melio, a U.S.-based B2B payments platform. CEO Sukhinder Singh Cassidy stated the deal “enables a step-change in our North America scale.” Xero shares closed Tuesday at $194.21, up 16% for the year.
Today’s agenda
Investors will be watching monthly inflation data for May. NAB expects the CPI indicator to fall to 2.2% year-on-year, down from 2.4%. Being the mid-month of the quarter, the release offers broader coverage of services within the CPI basket.
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