Wall Street up, hopes for easing of Israel-Iran conflict

Wall Street ended Monday's session with moderate gains in the major indices as investors hope that the armed conflict between Israel and Iran will soon end with some form of agreement.

Dow Jones Industrial closed up 0.75 percent and reached 42,515.09 points.

At the end of the day, the S&P 500 gained 0.94 percent and amounted to 6,033.11 points.

The Nasdaq Composite rose 1.52 percent to 19,701.21 points.

The Russell 2000 mid-cap index rose 1.12 percent to 2,124.13 points.

The VIX index falls by 8.21%, to 19.11 points.

Investors remain focused on geopolitical news following Israel's attack on Iran.

“The market is taking comfort in the prospect that the conflict may remain contained,” Krishna Guha, vice president at Evercore ISI, wrote in a note Monday.

"We assess that this is possible, but in the baseline scenario we still expect the conflict to last several weeks and we see an increased risk of escalation," he added.

On Sunday, US President Donald Trump said there was a good chance that an agreement between Israel and Iran would be reached. "There will soon be peace between Israel and Iran," he wrote on social media Social Truth. "There are a lot of phone calls and meetings going on right now," he added.

Meanwhile, The War Zone reported Monday that more than 20 KC-135 and KC-46 aerial tankers departed from U.S. bases for bases in Europe and the Middle East on Sunday, prompting speculation that U.S. forces could be involved in an Israeli-Iranian war.

The Wall Street Journal reported that Iran has signaled through proxies that it is open to resuming negotiations as long as the U.S. does not join Israel in attacks. The report also said Iran has sent a message to Israel that both sides should scale back attacks.

Iran has asked Saudi Arabia and other Arab states to send information to President Donald Trump about pressuring Israel to immediately ceasefire. Iran is also offering to resume negotiations on the nuclear deal, Reuters reported, citing its sources.

The attacks continued for a fourth day Monday, with both countries targeting each other’s energy facilities, an escalation that could further shake the global economy and markets in the coming week. Iran said it was considering closing the Strait of Hormuz, a key route for the global oil market. Israel claimed Monday that it had achieved “air superiority” over Iran, according to a military spokesman.

Shares of the Magnificent Seven rose Monday as investors took on more risk. Tesla rose more than 1% and Meta Platforms gained more than 2%. Meanwhile, Palantir, which is seen as a beneficiary of rising conflicts around the world, rose more than 3%.

Fed funds futures are pricing in a 100% chance the central bank will keep interest rates on hold, according to CME Group’s FedWatch tool, even as Trump pressures Federal Reserve Chairman Jerome Powell to cut rates.

Higher oil prices due to the conflict in the Middle East are likely to further reduce the chances of the Federal Reserve easing monetary policy in the near term, analysts said.

The Empire Manufacturing Index fell to -16.0 points in June from -9.2 points a month earlier. Analysts had expected the index to be -6.3 points.

WTI crude oil on NYMEX for July delivery fell by 2.30 percent to USD 71.30 per barrel, while Brent on ICE lost 1.91 percent and is at USD 72.81 per barrel. (PAP Biznes)

pr/