Dow Jumps 500 Points as Israel-Iran Ceasefire Leads to Extended Rally on Wall Street

US stocks moved sharply higher during trading on Tuesday, extending the strong upward move seen throughout the previous session. The Nasdaq surged 281 points, or 1.4 per cent, to 19,912, the Dow jumped 507 points, or 1.2 per cent, to 43,089, and the S&P 500 shot up 67 points, or 1.1 per cent, to 6,092. With the continued advances, the major averages reached their best closing levels in four months. The continued strength on Wall Street came after President Donald Trump announced a ceasefire between Israel and Iran is now in effect.

The US dollar extended its decline amid easing tensions in the Middle East and comments from Federal Reserve Chair Jerome Powell. On the U.S. economic front, the Conference Board released a report showing an unexpected decline in consumer confidence in June.

Semiconductor stocks turned in some of the market’s best performances on the day, with the Philadelphia Semiconductor Index soaring by 3.8 per cent to its best closing level in five months. Oil prices fell sharply for a second consecutive day. Global oil prices have fallen below the mark when Israel initially launched airstrikes against Iran on June 12.

The Indian rupee staged a strong comeback, surging 78 paise against the US Dollar to close at 85.97, marking its highest close since June 12. This significant appreciation was primarily driven by a sharp fall in crude oil prices following reports of an Israel, Iran ceasefire. The Nifty today witnessed a session marked by massive intraday volatility, ultimately settling with a modest gain yesterday. The Midcap and Small Cap indices continued to outperform the Benchmark. The Nifty failed to decisively surpass the 25,200 on the closing basis, indicating the continuation of its consolidation trend. The levels of 24,733 will continue to serve as a strong support, while 25,200 will remain a key resistance for the Nifty in the short term. Indian markets are expected to open with a flourish and attempt to break past the 25222 resistance level today.

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Source: HDFC Securities Prime Research