empty
24.06.2025 07:19 AM
The Market Has Moved On From the War

Does Iran want war? Judging by the symbolic attack on American bases in Qatar, Tehran does not appear eager to enter into an armed conflict with Washington — which it would lose anyway. The fact that no U.S. military personnel were harmed, combined with Donald Trump's statement about a ceasefire in the Middle East and dovish comments from FOMC officials, propelled the S&P 500 upward.

The main catalyst for the broad index rally was the plunge in oil prices. Historically, sharp spikes in oil prices have often led to recessions in the U.S. economy and crashes in the American stock market. This time, such a scenario was avoided — giving S&P 500 buyers a boost of confidence.

S&P 500 and Oil Price Dynamics

This image is no longer relevant

The best the Brent bulls could do was push the price of North Sea crude to $80 per barrel. At the onset of the war in Ukraine, prices soared above $120. Back then, investors were shocked and feared that one of the world's top oil producers would be pushed out of the market. Moreover, demand exceeded supply at the time.

Now, the situation is reversed: supply exceeds demand. The Middle East is in a constant state of turmoil, and the markets are used to it. If the U.S. and Israel had not limited their attacks to Iran's nuclear infrastructure and instead targeted economic facilities, Tehran would have shut down the Strait of Hormuz. Ultimately, the end of the conflict — which will likely be dubbed the Twelve-Day War — triggered a wave of S&P 500 buying.

Morgan Stanley claims that most geopolitical sell-offs in the broad stock index are short-lived and modest. According to the bank's research, previous episodes led to a decline in the S&P 500, but over one, three, and twelve months, the index rose by an average of 2%, 3%, and 9%, respectively.

It appears traders once again seized the opportunity to buy the dip in the U.S. stock market. Retail investors still dominate the action. Institutional investors have reduced their bullish positions on the S&P 500. Now, the index no longer appears overbought. Combined with reduced demand for downside hedging, this points to limited correction potential.

Market Expectations for Fed Rate Moves

This image is no longer relevant

This image is no longer relevant

Dovish comments from FOMC officials are also fueling the S&P 500 rally. Following Christopher Waller, Michelle Bowman has also advocated for a federal funds rate cut in July. Notably, she was the only one to vote against the Fed's aggressive monetary expansion in September. It's also interesting that Donald Trump appointed both officials.

Technically, on the daily chart, there was a failed breakout of dynamic support represented by moving averages. In a strong bull market, this signals that the correction has run its course. A return to buying is recommended if the price breaks through 6051.

Marek Petkovich,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

Gold Resumes Its Uptrend

Gold rose at the opening of the Asian session on Monday as traders evaluated differing views among U.S. Federal Reserve officials on how President Donald Trump's tariff policy might affect

Jakub Novak 12:03 2025-07-21 UTC+2

No Consensus on Interest Rates Within the Federal Reserve

Judging by recent comments from several Federal Reserve officials, the committee has yet to reach a consensus on interest rate policy. While some members continue to stress the need

Jakub Novak 12:01 2025-07-21 UTC+2

The Euro May Get a Chance to Rise

Traders preparing for the upcoming European Central Bank meeting this Thursday, which will focus on setting interest rates, should also pay close attention to numerous economic reports this week

Jakub Novak 11:59 2025-07-21 UTC+2

Good news already priced in?

Not long ago, Donald Trump could send Wall Street into turmoil with a single social media post. Now, he is threatening to fire the Fed chair and remove the firewall

Marek Petkovich 09:13 2025-07-21 UTC+2

What to Pay Attention to on July 21? A Breakdown of Fundamental Events for Beginners

There are no macroeconomic reports scheduled for Monday. Therefore, weak market movements can be expected. Of course, Donald Trump could unexpectedly return to the spotlight at any moment with

Paolo Greco 04:01 2025-07-21 UTC+2

EUR/USD Weekly Preview: Tariff Saga, ECB Meeting, PMI and IFO Indices

The penultimate week of July lies ahead. We will learn the outcome of the next European Central Bank meeting as well as the July figures of key macroeconomic indicators. Additionally

Irina Manzenko 00:07 2025-07-21 UTC+2

U.S. Dollar. Weekly Preview

As mentioned in the two previous reviews, market movements next week will depend on the "four global themes." I previously stated that there might be no news on these themes

Chin Zhao 00:06 2025-07-21 UTC+2

British Pound. Weekly Preview

The fate of the British pound will also lie within the realm of the "four global themes": the standoff between Trump and Powell, new U.S. trade deals, Trump's new tariffs

Chin Zhao 00:06 2025-07-21 UTC+2

Euro Currency. Weekly Preview

The upcoming week promises to be an interesting one. Market participants are about to get answers to several key questions. First, will there be an upward corrective wave as part

Chin Zhao 00:06 2025-07-21 UTC+2

XAU/USD. Analysis and Forecast. Gold is supported by moderate USD weakness and trade-related uncertainty

Today, gold is trading higher, remaining within a sideways trend. Late Thursday, Federal Reserve official Christopher Waller stated that rising risks to the economy could justify a key rate

Irina Yanina 19:15 2025-07-18 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.