On Monday, June 12, 2023, U.S. stock indexes experienced significant gains, with the S&P 500 rising by 1.65%, the Dow Jones Industrial Average increasing by 0.92%, and the Nasdaq 100 climbing by 3.06%. This market rally followed the announcement that the U.S. and Iran would end their war, leading to the reopening of the Strait of Hormuz, which is crucial for oil transport.
WTI crude oil prices fell over 4%, reaching a three-month low amid the geopolitical developments, resulting in heightened investor optimism and lower inflation expectations. Additionally, a series of weaker-than-expected economic reports, including a sharp decline in the June Empire manufacturing survey from 19.6 to 5.7, contributed to the market’s mixed sentiment. Despite these reports, technology stocks surged, with major gains in semiconductor and AI-related companies.
International markets mirrored the U.S. trend, with the Euro Stoxx 50 hitting a record high and Japan’s Nikkei-225 surging to an all-time high. As of Monday, the likelihood of a 25 basis point rate hike at the FOMC’s next meeting is estimated at just 4%.
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