Major U.S. stock indices climbed on Monday, June 16, as reports suggested that hostilities between Iran and Israel might soon ease.
Signs of de-escalation have heightened risk appetite among investors. The Dow Jones Industrial Average was up 356 points, or 0.84 percent, with high-growth stocks seeing the biggest gains. At the same time, the S&P 500 rose 0.94 percent, while the tech-heavy Nasdaq gained 1.45 percent.
Tech and financial stocks were among the top performers, with Nvidia up 2.6 percent since market open. Tech firms IBM, Cisco, and Salesforce also posted strong gains, while financial companies American Express and Goldman Sachs rose 2.66 percent and 2.76 percent, respectively.
The rally followed news of potential progress in easing tensions between Iran and Israel. Reports indicated that Iran may be willing to restart negitiations over its nuclear program with the United States, following heavy losses from Israeli airstrikes.
Geopolitical tensions in the Middle East had weighed heavily on markets throughout the week. Traders were particularly concerned about the possibility of U.S. military involvement, which could have destabilized the region further. Escalation was especially worrying due to Iran’s proximity to the world’s largest oil reserves in the Gulf. A broader regional conflict risked driving up oil prices, potentially accelerating global inflation and undermining investor risk appetite.
EU ready for deal with U.S. on trade
Investors saw good news on the trade front after reports that the EU is ready to accept a baseline 10% tariff on its exports to the U.S. Negotiators hope that the offer would help avert tariffs on specific industries, including automobiles, drugs, and electronics.
EU officials further stated they were prepared to reduce tariffs on U.S. vehicles and adjust some non-tariff barriers affecting the industry. Additionally, the bloc is considering a ban on purchasing Russian natural gas, a move that could benefit U.S. energy producers.
