Stan Choe, David Mchugh, Elaine Kurtenbach, AP Business Writer
NEW YORK (AP) – Oil prices are falling even further, and US stocks hope that Israeli Iran’s war will not want to undermine the crude trends of the world, even if a temporary ceasefire appears to be on fire in the morning.
The S&P 500 followed up even greater profits in European and Asian stocks, up 0.9% in morning trading. This comes after President Donald Trump said late Monday that Israel and Iran agreed to a “complete and complete ceasefire.” The main measure of Wall Street health returned within 1.1% of record in February after falling below about 20% during the spring.
The Dow Jones industrial average rose 352 points (0.8%) as of 10:45am Eastern time, with Nasdaq composites 1.2% higher.
The strongest action was once again taken in the oil market. There, the US crude oil benchmark barrel fell 4.4% to $65.52. International standard Brent crude oil fell 5% to $66.96.
The fear of the entire Israeli-Iran conflict was that it could narrow the world’s oil supply. Iran is a major producer of crude oil and can also try to block the Strait of Hormuz off the coast, where 20% of the world’s daily oil needs pass by by ship.
Oil prices began to fall sharply on Monday after launching what appears to be a limited retaliatory strike that does not target oil production or movement. They continued to fall after attacks passed the deadline to stop hostilities early Tuesday. Trump later said the ceasefire was “effective.”
As oil prices have dropped significantly over the past two days, they are below before the battle began almost two weeks ago.
As the global oil market is fully supplied and production steadily increases due to the OPEC+ alliance of producers, oil prices could be even lower as long as a ceasefire is maintained and a lasting peace solution is found.
The decline in oil prices should put some pressure on them from inflation, which could give the Federal Reserve more room to cut interest rates.
Wall Street loves lower rates as it can boost the economy by making it cheaper for American households and businesses to buy cars and build factories. But they can also fuel inflation more. The latter threat is why the Fed has been hesitant to cut fees this year after lowering them by the end of last year.
The Fed has repeatedly said he wants to wait and see how much Trump’s tariffs will hurt the economy and raise inflation before committing to the next move. So far, the economy appears to be OK, but reports of trust among US consumers have been weaker than economists expected on Tuesday, but inflation has only slightly surpassed the Fed’s 2% target.
But Trump is calling for more cuts in fees. And two of his Fed’s appointees said last week that the Fed’s next meeting next month may soon be considering the cut rate.
Federal Reserve Chairman Jerome Powell remains more cautious. He said again in testimony presented to Congress on Tuesday. The Fed said it was “well positioned to wait to learn more about possible economic courses before considering adjusting its policy stance.”
Such a mixed message was the Treasury tumbling up and down in the bond market. The 10-year Treasury yield eased from 4.34% to 4.30% late Monday.
The two-year financial yield, which more closely tracks expectations for the Fed’s actions, fell from 3.84% to 3.82%.
On Wall Street, cruise operator Carnival steamed 9.7% higher after offering much stronger benefits than analysts expected. CEO Josh Weinstein said there is strong demand from people booking cruises near the departure date, with customers spending hard once on board. Carnival also raised forecasts for the measures underlying year-round profits.
Other companies that burn a lot of fuel and could potentially profit from falling oil prices have also jumped at big profits. Norway’s cruise line jumped 6.4%. United Airlines rose 2.2%, while Delta Airlines rose 2.8%. These travel-related businesses need to feel confident enough that their customers are profitable.
In overseas stock markets, the index has grown by more than 1% from France to Germany, Germany and Japan following the announcement of a ceasefire between Israel and Iran. Hong Kong’s 2.1% jump and South Korea’s 3% leap were two of the most powerful moves.
Original issue: June 24th, 2025 9:38am EDT
