Stocks Rally on Ceasefire News, Lower Oil, and a Dovish Powell

The U.S. stock market traded higher throughout Tuesday’s session, buoyed by a wave of positive catalysts that helped offset lingering macro concerns.

Sentiment improved sharply after President Trump announced a ceasefire agreement between Israel and Iran, easing geopolitical tensions that have weighed on markets in recent weeks. At the same time, oil prices extended their decline. WTI crude, which topped $78 per barrel just yesterday, plunged another 6.1% to settle at $64.46, delivering a welcome reprieve for consumers and inflation watchers alike.

Treasury yields also drifted lower following a weaker-than-expected June consumer confidence report, which showed a decline in average 12-month inflation expectations. The 2-year yield slipped two basis points to 3.81%, while the 10-year yield also dipped two basis points to 4.30%.

Adding to the day’s optimism, Carnival Corporation provided an upbeat full-year outlook, sending its shares nearly 7% higher and boosting the broader travel and leisure space. Meanwhile, on Capitol Hill, Senate leaders accelerated efforts to pass the reconciliation bill and have it signed into law by July 4.

On the policy front, Fed Chair Powell testified before the House Financial Services Committee, delivering his semiannual monetary policy report. Powell acknowledged that higher tariffs could put upward pressure on prices and dampen economic activity, but he also signaled flexibility, noting that inflation could surprise to the downside—opening the door to potential rate cuts sooner than previously expected. While Powell has hinted at this scenario before, his measured tone and willingness to keep options open provided further reassurance to a market already relieved by signs of geopolitical de-escalation.

The session saw broad-based buying that lifted the S&P 500 to an intraday high of 6,101.76 just before the close. Mega-cap tech and semiconductor stocks powered the advance, and the risk-on mood spilled over into high-beta and small-cap names as well.

The information technology sector led the charge, up 1.6%, boosted by strong gains in chipmakers such as NVIDIA, which climbed 2.5%. The Philadelphia Semiconductor Index jumped 3.8% on the day, pushing its quarterly gain to an impressive 27.4%. Other leaders included financials (+1.5%), communication services (+1.4%), and health care (+1.2%).

On the flip side, the energy sector fell 1.5%, tracking crude’s sharp decline, while consumer staples dipped a modest 0.03%, marking the only other losing group.

Market breadth was decidedly positive, with advancers beating decliners by nearly 3-to-1 on the NYSE and by an even wider margin at the Nasdaq. Trading volume came in above average at the NYSE but remained below average for the Nasdaq.

Our U.S. portfolio, FTInvest 11, continued to retreat on Tuesday, pressured by weakness in its energy and transportation holdings. The index slipped 0.81% for the day, closing at 767.43. Lingering softness in oil prices and concerns about demand trends in the transport sector contributed to the pullback. We will be watching closely to see if the portfolio can stabilize in the coming sessions or if further sector-specific headwinds will keep the pressure on.