Why is the stock market up today? Dow, Nasdaq rally on Trump ceasefire, Powell remarks
U.S. stocks are sharply higher on Tuesday with the Dow Jones Industrial Average gaining 0.9%—roughly 400 points—alongside a 1.1% jump in the Nasdaq and a 0.9% lift in the S&P 500. The rally follows a high-profile ceasefire declaration from President Donald Trump and dovish signals from Federal Reserve Chair Jerome Powell.
Trump ceasefire sparks relief rally
The rally began overnight after Trump announced via Truth Social that a ceasefire between Israel and Iran was officially in effect. Despite ongoing tensions and conflicting reports of further attacks, investors interpreted the development as a potential turning point in a volatile geopolitical episode that had previously rattled markets.
Trump warned Israel against further military escalation, telling the nation to “bring your pilots home,” indicating strong U.S. pressure to maintain peace. This development eased concerns over potential oil supply disruptions in the Strait of Hormuz and broader Middle East instability.
As a result, oil prices tumbled, with West Texas Intermediate crude falling over 4% to around $66 per barrel. Lower oil prices reduce inflationary pressure and are often viewed as bullish for equities.
Powell adopts wait-and-see stance on rates
Another driver of Tuesday’s rally came from Fed Chair Jerome Powell, who delivered prepared testimony to Congress. Powell reaffirmed the central bank’s wait-and-see approach, stating that recent economic resilience allows the Fed to pause and observe inflation trends before considering interest rate adjustments.
This stance calms investor fears that aggressive rate hikes could resume. While Powell did not promise imminent cuts, the suggestion that rates will remain stable for now provided confidence for equity markets.
Broader market surge
The upbeat sentiment was widespread. Small caps on the Russell 2000 also gained 1.1%. Tech stocks led the charge, with major names like Nvidia (NVDA), Tesla (TSLA), and Alphabet (GOOGL) posting solid early gains. Tesla extended its momentum following a successful robotaxi launch in Austin, Texas, while Nvidia neared a breakout level on bullish AI momentum.
Meanwhile, Uber (UBER) rallied over 4%, and Carnival (CCL) rose nearly 3% on strong earnings. The Invesco QQQ Trust (QQQ) and SPDR S&P 500 ETF (SPY) were up 1.2% and 0.9%, respectively.
What investors are watching next
Looking ahead, market participants are focused on the durability of the ceasefire and further Congressional testimony from Powell. Economic data releases, including consumer confidence and housing numbers, will also play a key role in shaping sentiment.
Historically, markets have recovered quickly from geopolitical shocks. A recent Morgan Stanley analysis showed the S&P 500 tends to gain an average of 2% in the month following such events.
As of now, the market’s rebound is being driven by a powerful combination of geopolitical relief, monetary policy stability, and strong corporate earnings.
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