On Wednesday, U.S. stock indexes closed mixed: the S&P 500 Index fell 0.28%, the Dow Jones Industrial Average dropped 1.09%, while the Nasdaq 100 Index rose 0.27%. The fluctuations follow President Trump’s announcement that the U.S. will cease its ceasefire with Iran, which contributed to rising crude oil prices and increased bond yields, pushing the 10-year Treasury yield to a 1.5-month high of 4.59%.
Crude oil prices surged over 4% to a two-week high amid concerns over renewed hostilities in the Middle East, as the U.S. launched strikes against Iran in response to recent attacks on commercial shipping in the Strait of Hormuz. U.S. MBA mortgage applications fell by 2.2% for the week ending July 3, with the average 30-year fixed mortgage rate increasing slightly to 6.58%.
Expectations for strong Q2 earnings are on the rise, with forecasts suggesting a potential increase of 23% driven by AI infrastructure investments, which may contribute nearly 60% of the S&P 500’s earnings-per-share growth. The next FOMC meeting scheduled for July 28-29 is pricing in a 31% chance of a 25 basis point rate hike.
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