S&P 500 surges on Middle East update, near record highs
The S&P 500 is within 1% of its all-time high.
Didn't see that coming? You're likely not alone. A year of tariff tussles capped off with bombs flying in the Middle East probably had most worried about their stock market portfolios.
Yet, despite the chaos, the S&P 500 has continued an epic run since it got oversold in early April following President Trump announcing tougher-than-thought tariffs on global trade partners.
Related: Wall Street veteran analyst who predicted stock market rally resets forecast
The SPDR S&P 500 ETF (SPY) has now marched more than 22.6% higher since President Trump paused implementing most reciprocal tariffs on April 9 for 90 days. The tech-heavy Nasdaq Composite has performed even better, rallying 30.4%.
The S&P 500 is now only 1.1% below an all-time high. The Invesco Nasdaq 100 Trust (QQQ) , which comprises the biggest stocks in the Nasdaq, including Nvidia, is within 0.20% of an all-time high.
I bet you didn't have that on your bingo card. Especially, last week, when worry mounted that the stock market's run would falter under the weight of rising geopolitical worry after Israel attacked Iran, prompting daily missile fires between the two countries.
Middle East ceasefire helps send stocks soaring
The potential for the conflict to spread sent oil prices surging, and concerns seemed well founded when the US announced on June 22 it had dropped bunker busters on Iran's Fordow nuclear facility.
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Yet, the stock market largely looked beyond the concerns as big money investors made bets that the war would be measured in days not years.
The S&P 500 retreated just 0.46% last week, while the Nasdaq 100 was essentially flat. On Monday, when markets opened after the US bombing, stocks found their footing, surging on hopes for a ceasefire.
The gains continued on June 24, as investors increasingly became comfortable with tensions deescalating,
The S&P 500 gained 1.1% on June 24 while the Nasdaq Composite gained 1.4% on the session.
Initially, it appeared that tempers would overcome peace, given Iran and Israel both launched additional missiles after President Trump's ceasefire announcement.
Those actions sparked a sharp rebuke from President Trump, who laid into both countries before boarding Marine One on the White House lawn.
"I'm not happy with Israel...I'm not happy with Iran... We basically have two countries that have been fighting so long, so hard, that they don't know what the f--- they're doing," said Trump.
The two sides seemed to move closer to ceasefire as the day progressed.
On Polymarket, bets suggest currently suggest only a 4% chance that the important Strait of Hormuz, which handles 20% of global oil supply, would close before July. Similarly, Polymarket's data indicates less than a 1% chance that the US declares war on Iran, and a 6% chance of another US attack on Iran before month's end.
On June 23, veteran analyst Tom Lee suggested that the risks associated with geopolitical conflict may be priced in, setting the stage for more upside.
Ambarella (AMBA) was among the biggest gainers, rising 21% on takeover chatter. Coinbase (COIN) rallied 12% in the wake of stablecoin legislation.
