The S&P 500 index approached its record value on Wednesday because of decreasing tensions between Israel and Iran which improved market sentiment. President Donald Trump’s ceasefire agreement showed signs of stability which reduced concerns about expanded conflicts and disrupted energy supplies.
The S&P 500 index stayed 0.6% below its February peak and the Nasdaq remained 0.8% below its historical high. The Nasdaq 100 reached its highest point during the day because information technology stocks experienced positive movement.
Market participants maintained their positive outlook despite occasional breaches of the ceasefire because the conflict seemed to be winding down. Fed Chair Jerome Powell maintained his cautious position regarding interest rates during his Capitol Hill testimony by stating that policy would stay unchanged unless inflation remains low or labor market conditions deteriorate.
Boston Fed President Susan Collins stated that the duration of price shock effects from tariffs remains unclear. The market experienced a 0.11% decline in the Dow Jones while the S&P 500 increased 0.11% and the Nasdaq gained 0.36% at 10:15 a.m. ET. The technology sector led the market with a 1.1% gain while real estate and utilities sectors experienced the most significant declines.
Market participants currently expect interest rate reductions totaling 60 basis points during the current year with a rising probability of a 25-basis-point reduction in September.
