Stock Market Today: Dow Rallies 400+ Points as Middle East Tensions Ease

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Market Overview

The S&P 500 jumped 1% on Monday, June 16, 2025, as investors welcomed signs of potential de-escalation in the Israel-Iran conflict that had rattled markets last week. The Dow Jones Industrial Average surged over 400 points, or 1%, while the tech-heavy Nasdaq Composite climbed 1.3% near the close of trading.

Oil prices retreated from their recent spike, with West Texas Intermediate crude futures falling 1.3% to $72.04 per barrel, though still significantly higher than the $60 level seen at the beginning of June. The pullback in oil prices came after reports that Iran has been urgently signaling its desire to end hostilities and continue negotiations regarding its nuclear programs, according to The Wall Street Journal.

Key Market Movers

Tech stocks led today’s market rebound, with shares of major technology companies rising across the board. Tesla (TSLA) continued its recovery from last week’s gains, adding another 2% today as the electric vehicle maker’s stock rebounds from the downturn that followed a public dispute between CEO Elon Musk and President Donald Trump.

Other tech giants also posted solid gains, with chipmakers Nvidia (NVDA) and Broadcom (AVGO) each rising about 1%. Microsoft (MSFT), Apple (AAPL), Amazon (AMZN), Alphabet (GOOG), and Meta Platforms (META) all moved higher as well.

Data analytics provider Palantir (PLTR) rose more than 2%, while semiconductor stocks including Advanced Micro Devices (AMD) and Micron Technology (MU) also gained over 2% each.

Airline Stocks Recover

Airline stocks, which had been hammered on Friday due to concerns about higher fuel costs, bounced back strongly today. Delta Air Lines (DAL), United Airlines (UAL), and American Airlines (AAL) each gained approximately 2% as oil prices retreated from their Friday highs.

The recovery in airline stocks reflects investor relief that the spike in oil prices might be temporary if diplomatic efforts succeed in containing the Middle East conflict. Last week’s surge in crude oil had raised concerns about profit margins for carriers, as fuel represents one of their largest operating expenses.

Upcoming Market Events

All Eyes on the Fed
The biggest market event this week will be the Federal Reserve’s interest rate decision on Wednesday, June 18. While the central bank is widely expected to keep rates steady in the current range of 4.25%-4.5%, investors will be closely watching for signals about potential rate cuts later this year.

The Fed’s latest projections, including the closely watched “dot plot” that shows each official’s prediction for interest rates, will be released on Wednesday. In March, Fed officials had projected two rate cuts for 2025, but recent inflation concerns and geopolitical tensions may have altered their outlook.

Fed Chair Jerome Powell’s press conference will be scrutinized for any hints about the timing of potential rate cuts, especially as the central bank weighs the impact of President Trump’s tariff policies on inflation against signs of a cooling job market.

Market Outlook

Despite Friday’s sell-off, market sentiment remains cautiously optimistic. The S&P 500 is currently about 2.9% away from setting a new all-time high, according to Bespoke Investment Group co-founder Paul Hickey.

“The S&P has stabilized with less volatility over the last few weeks, giving it a chance to re-charge for an eventual breakout to new highs,” Hickey noted.

Investors are also monitoring developments in the cryptocurrency market, with Bitcoin trading around $106,800, up from a weekend low of approximately $104,000 but still below its recent peak of nearly $112,000.

Looking Ahead

Market participants will continue to watch for developments in the Middle East conflict, but analysts suggest that as long as hostilities remain limited between Israel and Iran, the impact on broader markets should be contained.

The economic calendar is relatively light this week, putting even more focus on Wednesday’s Fed decision. Investors will be looking for clarity on how central bankers view the latest inflation data and whether they still anticipate rate cuts in 2025 despite ongoing geopolitical uncertainties and tariff-related inflation concerns.

As the second half of 2025 approaches, market participants are also watching for potential stock buyback activity, which could provide additional support for equity prices in the coming months.