Nasdaq 100 and S&P500: Midday Rally Builds as Oil Plunges and Rate Bets Shift

Dow Rallies 500 Points Mid-Session as Oil Collapses on Ceasefire Hopes

Stocks surged Tuesday midday, with the Dow up more than 500 points, as investors welcomed a steep drop in oil prices and a tentative ceasefire between Israel and Iran. The S&P 500 advanced around 1%, while the Nasdaq outperformed, gaining about 1.4%. A broad risk-on move was underway, supported by easing geopolitical tensions and investor confidence in economic fundamentals.

How Are Oil Prices and Airlines Responding to Ceasefire Developments?

U.S. crude dropped over 6% midday, extending Monday’s 7% slide and marking a two-day decline of roughly 13%. Brent crude followed suit, hitting fresh session lows.

The pullback in energy prices fueled gains across transportation stocks. United Airlines, Frontier, and Delta all rose more than 2%, as traders priced in a drop in jet fuel costs.

The sharp selloff in oil followed signs of de-escalation in the Middle East. President Donald Trump claimed that “ISRAEL is not going to attack Iran” and insisted the ceasefire remained in place, despite mutual accusations of violations. Israel alleged attacks on radar installations near Tehran, while Iran denied retaliatory missile launches.

Which Stocks and Sectors Are Leading the Charge?

Risk appetite extended beyond transport. Broadcom gained 3%, continuing its recent momentum in AI infrastructure, while Nvidia rose 2%, supported by sustained strength in semiconductor demand. The gains came as investors brushed off immediate geopolitical risks and rotated into higher-beta names.

UBS Global Wealth Management’s Solita Marcelli noted that geopolitical shocks tend to have limited market impact, and pointed to strong fundamentals underpinning the equity rally. Tuesday’s advance built on Monday’s solid gains, which came after Qatar said it had intercepted Iranian missiles targeting a U.S. military base.

What Is the Federal Reserve Signaling on Rates?

Traders also weighed comments from Fed Chair Jerome Powell, who testified before the House Financial Services Committee. Powell emphasized patience, stating the Fed would wait to assess the economic fallout from new tariffs before adjusting rates. Meanwhile, some Fed officials floated the possibility of easing policy as soon as July, suggesting growing internal debate.

What’s the Outlook Heading Into the Close?

With oil off sharply and tech leading gains, sentiment remains bullish so long as geopolitical tensions don’t reignite. Traders are now focused on upcoming inflation data and Fed commentary for clues on policy direction.

If energy prices stay low and the ceasefire holds, the market could maintain its upward momentum—though volatility may resurface with any policy or geopolitical misstep.

More Information in our Economic Calendar.