Nasdaq 100 Hits Record High as Iran Truce Holds

The Nasdaq 100 index, which includes the largest American tech stocks, struck a record high on Tuesday as markets assessed the fragile ceasefire between Israel and Iran. Though the broader stock rally paused, recent gains held, with investors watching for updates as Trump heads to The Hague for the NATO summit. EUR/USD returned towards 3-year highs as reduced haven demand saw the dollar resume its months-long decline.  

Equities

The FTSE 100 ended flat on Tuesday, held back by falling oil stocks and a stronger pound, which rose 0.6%. BP dropped 4.8% and Shell fell 3.8% as oil prices tumbled 5% following a ceasefire between Israel and Iran, reducing supply concerns.

The FTSE 250 rose 1%, reaching its highest level in over a week. Carnival led the midcap index with a sharp 11.8% rise after the cruise operator lifted its full-year profit forecast and beat second-quarter earnings expectations.

The FTSE 350 Travel & Leisure index rose 3.6% as lower oil prices boosted sentiment across the sector. Recruitment firm SThree gained 7.4% after reporting a slowdown in the decline of fee income in its US business, supported by improved contractual hiring.

In the US, the S&P 500 rose 1.11% to 6,092.18, coming close to its February record high, while the Dow gained 1.19% and the Nasdaq climbed 1.43% to 19,912.53. The Nasdaq 100 closed at a new all-time high.

Broadcom rose 3.9% to a record high after HSBC upgraded the stock to “buy” from “hold”. Tesla dropped 2.4%, underperforming other large-cap tech shares. FedEx fell over 4% in after-hours trading after issuing quarterly results. Shares in Coinbase rose 12.1% and Microstrategy gained 2.7% after Bitcoin touched a one-week high.

Technology stocks led gains across the S&P 500, while energy stocks fell 1.5%. Airline shares rose as Middle East tensions eased, with the S&P 1500 Airlines index up 2.4%. Defence companies slipped: Lockheed Martin 2.6% and RTX lost 2.7%.

US consumer confidence weakened in June, with sentiment around the jobs market falling to its lowest since March 2021. Markets are pricing in a nearly 70% chance of a rate cut by September.

Forex & Commodities

The US dollar held near a one-week low on Wednesday, following broad selling after the announcement of a ceasefire between Israel and Iran.

Investors responded cautiously to comments from Federal Reserve Chair Jerome Powell, who told Congress that interest rate cuts would be delayed until the effects of recent tariff increases become clearer. Powell said the Fed is “well positioned to wait” before adjusting policy.

The dollar index stood at 97.97, with traders reducing safe-haven positions built up during the 12-day conflict. The euro traded at $1.1614, close to its highest level since October 2021.

Sterling eased slightly by 0.03% to $1.3614, having earlier touched $1.3648, its strongest since January 2022. The Swiss franc remained firm at 0.8052 per dollar, just below its 10½-year high reached on Tuesday. The Japanese yen edged down 0.1% to 145.03 against the dollar after Bank of Japan policymakers signalled caution about raising rates due to uncertainty linked to US tariffs.

Gold prices rose as Treasury yields and the dollar slipped. Spot gold gained 0.1% to $3,328.18 per ounce, having briefly hit its lowest in more than two weeks the previous day. Spot silver was up 0.1% at $35.95, while platinum and palladium slipped 0.2% and 0.4% respectively.

Brent crude rose 1.3% to $67.99 a barrel and WTI crude added 1.4% to $65.24. Both benchmarks remained near multi-week lows after Tuesday’s sharp fall. Investors assessed the ceasefire’s impact, with expectations that global crude flows will remain uninterrupted. US crude inventories declined by 4.23 million barrels last week, according to API data ahead of official figures due today (Wednesday).