Stocks rise after ceasefire announcement with Iran and Israel, despite Fed holding off rate cuts
From Yahoo Finance: 2025-06-24 16:05:00
Stock prices surged as tensions between the U.S., Iran, and Israel eased, with the S&P 500 climbing 1.11% after President Trump announced a ceasefire. Despite this, Federal Reserve Chair Powell indicated no immediate interest rate cuts due to inflation concerns, signaling a steady monetary policy for the near future.
Investors celebrated the ceasefire announcement, leading to a drop in oil prices and a rise in airline stocks like Delta and United. Markets also saw gains after Iran’s restrained response to a U.S. strike over the weekend, signaling relief over reduced geopolitical tensions.
Powell’s testimony before the House Financial Services Committee highlighted concerns over inflation due to tariffs and potential Iranian cyberattacks on the U.S. Despite these risks, Powell emphasized the need for caution in cutting interest rates, citing a strong economy and labor market.
Iranian cyberattacks have been a historical issue, with the U.S. Treasury Department sanctioning Iranian entities for phishing and malware attacks. The cyber division of the Iranian Islamic Revolutionary Guard Corps compromised numerous email accounts, raising concerns about cybersecurity threats and economic stability.
Despite pressure from President Trump, Powell remains resistant to immediate rate cuts, citing expectations of rising inflation in the coming months. Emphasizing a strong economy and labor market, Powell expressed the need for a cautious monetary approach to balance economic growth and inflation concerns.