Dow Jones flat, oil plunges as fragile Israel – Iran ceasefire holds

U.S. stocks are eyeing a move toward record highs, with the S&P 500, Nasdaq, and Dow Jones Industrial Average opening higher Wednesday, June 25.

The S&P 500 opened 0.2% up, little changed in early trading after the benchmark index edged to 6,100 on Tuesday. Gains in the stock market saw the index hit its highest level since February, igniting bullish sentiment despite prevailing market conditions.

Dow Jones Industrial Average, which notched gains on Tuesday despite Iran-Israel’s delicate ceasefire, was flat. This outlook also has the Nasdaq Composite higher, 0.2% up at open, as investors factor in potential rate cuts and the possibility of Israel and Iran upholding the ceasefire.

S&P 500 eyes record highs

The S&P 500 rose 1.2% on Tuesday, closing less than 1% from a new all-time high, with gains adding to upside momentum that saw the benchmark index push higher at the start of the week. Easing hostilities between Iran and Israel, and reports that Iran isn’t seeking to block the Strait of Hormuz, a major oil passageway, buoyed markets.

With the S&P 500 on the cusp of a new rally to record highs, investors in other markets have also turned bullish. Crypto was broadly higher, and oil prices plunged 7% to trade at levels last seen before the flare-up in Israeli-Iranian tensions, including U.S. attacks on Iran’s nuclear sites.

“Markets barely reacted” to a violation of the Donald Trump–brokered ceasefire, analysts at QCP noted.

Fed chair’s comments and tariffs 

In addition to further updates on monetary policy from Jerome Powell as he speaks to Congress on Wednesday, investor focus will also be on upcoming economic data. In particular, data on Personal Consumption Expenditures, the Fed’s preferred inflation gauge, will be released on Friday.

Investors might want to pay attention to economic data rather than obsess with a rate cut, Carol Schleif, chief market strategist of wealth management provider BMO said. Speaking to CNBC on Wednesday, Schleif noted:

“The obsession with the Fed actually distracts us from looking at the economic data. I’m not sure why the markets are leaning into a cut so much.”

The tariffs front is also crucial, with Bloomberg reporting that the European Union saying it will retaliate if the U.S. holds the baseline 10% tariffs.