US equity markets climbed Tuesday as investors rotated back into risk assets following signs that the geopolitical outlook is easing. The S&P 500 rose about 1%, while the Nasdaq 100 gained more than 2%, helped by a sharp drop in oil that supported both stocks and bond sentiment.
Indexes also received a boost from US data: weekly initial jobless claims fell to 226,000, and the June Philadelphia Fed business outlook survey improved to 10.3. Trading activity appeared more volatile than usual ahead of options expirations tied to “triple witching,” with markets closed Friday for Juneteenth.
Key takeaways
- Price move: The S&P 500 was up about 1% and the Nasdaq 100 rose more than 2%.
- Catalyst: A preliminary US-Iran agreement and the resulting decline in crude oil eased inflation expectations and improved risk appetite.
- Market implication: Lower energy prices supported bond yields and benefited sectors tied to consumer travel, while oil weakness pressured energy stocks.
- Mixed signals: Chip and airline names gained, but IT services fell after weaker guidance from Accenture.
What drove the market higher
Shares surged after President Trump signed a preliminary deal intended to end the US-Iran war, Reuters said in a separate report. The news contributed to a drop in crude oil to a 3.5-month low, which in turn helped ease inflation expectations across markets.
As oil moved lower, bond yields followed. The 10-year US Treasury yield was down about 6 basis points to 4.43%, reflecting reduced expectations for near-term inflation pressure. At the same time, equities benefited from reduced geopolitical tail risk and improved sentiment for growth-oriented assets.
Economic indicators added support. Weekly initial unemployment claims declined by 4,000 to 226,000, near the 225,000 consensus level. The Philadelphia Fed survey for June rose by 10.7 points to 10.3, topping expectations of 10.0, suggesting business activity expectations improved even as broader markets grapple with ongoing macro uncertainty.
Sector leadership and company-specific moves
Semiconductor stocks led the rally. The iShares Semiconductor ETF rose more than 5% to a fresh record high, and Intel jumped about 7%. Intel’s strength followed President Trump’s comments that the company would work alongside Apple to design and produce semiconductors domestically. Other chipmakers including Marvell, Micron, Applied Materials, Microchip Technology, KLA, Lam Research, Qualcomm, NXP Semiconductors, and Texas Instruments also advanced.
Airlines and cruise operators benefited from energy’s pullback. With WTI crude down more than 3% to its lowest level in 3.5 months, several transportation names gained, including Alaska Air Group, Royal Caribbean Cruises, Carnival, and Norwegian Cruise Line Holdings, alongside Southwest, United, American Airlines, and Delta.
Not all areas participated. IT services stocks fell, led by a roughly 15% drop in Accenture after it issued a fourth-quarter revenue outlook of $17.75 billion to $18.40 billion, below the $18.47 billion consensus estimate. The forecast intensified investor concerns that consultancy demand could be pressured by AI-driven automation over time. Other decliners included Cognizant Technology Solutions, Huron Consulting Group, Globant, and IBM.
Energy-producing equities lagged. With crude weak, names across oil and services—such as APA, Halliburton, SLB, Chevron, Diamondback Energy, Exxon Mobil, ConocoPhillips, Occidental Petroleum, Baker Hughes, and Valero Energy—were mostly lower.
Oil, rates, and what investors are pricing
WTI crude prices fell more than 3% to a 3.5-month low after President Trump signed a memorandum of understanding in Paris that extends the US-Iran ceasefire for 60 days. The agreement is intended to allow the Strait of Hormuz to reopen and sets up additional negotiations toward a permanent end to the war.
Market participants also appeared to focus on potential supply normalization risks as vessel traffic resumes in the region. The article cited expectations that reopening could lead to the return of more than 100 oil-laden tankers currently stuck in the Persian Gulf, effectively adding to available stocks.
On rates, the article said markets are discounting a 32% chance of a 25 basis point hike at the next Federal Reserve meeting on July 28-29. In Europe, swaps implied a 17% chance of a 25 basis point ECB hike at the July 23 meeting.
European government bond yields generally moved lower. The 10-year German bund yield fell to 2.925%, while the 10-year UK gilt yield declined to 4.7483%. ECB Governing Council member Martin Kocher said consumer prices would remain elevated for some time even after an agreement to end the Middle East war and that the ECB stands ready to act to keep inflation on track toward the 2% target.
In the UK, data showed the April ILO unemployment rate unexpectedly fell by 0.1 percentage point to 4.9%. The Bank of England kept its policy rate unchanged at 3.75% and said it stands ready to act on inflation. The article noted Governor Andrew Bailey characterized the drop in crude prices as encouraging, while warning that energy prices remain unpredictable.
Global stocks and the “triple witching” factor
Overseas performance was mixed. Euro Stoxx 50 rose about 0.45% to a record high. China’s Shanghai Composite fell about 0.43% after trading off a three-week high, while Japan’s Nikkei-225 reached a record high and finished up about 1.65%.
In the US, price action may have been amplified by expirations of June options, futures, and derivatives—an event referred to as “triple witching.” The article also said markets are closed Friday for Juneteenth, which can affect liquidity and volatility into the close.
Tuesday’s market mix suggests investors are balancing easing geopolitical risk and lower energy costs against company-specific guidance that can quickly change sentiment. With oil moving and rate expectations shifting in response, index performance may remain sensitive to further updates on US-Iran negotiations and the next wave of economic data.
What to watch next: Traders will likely monitor continued developments related to the US-Iran ceasefire extension, the path of crude oil and Treasury yields, and upcoming central bank signals. With markets shut on Friday for Juneteenth, attention may also shift to the next scheduled US data releases and any further corporate guidance ahead of the next major earnings cadence.
