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Stock indices rise on Trump’s claim of ceasefire timeline

Stock futures climbed late on Monday after US President Trump announced a ceasefire timeline that aims to end the conflict between Israel and Iran. Futures linked to the Dow Jones Industrial Average gained and oil prices declined sharply, with Brent crude and WTI futures dropping by over 3%, as markets anticipated reduced geopolitical tensions. However, uncertainty remains as neither Israel nor Iran has officially confirmed the ceasefire agreement. Following the Federal Reserve’s decision to keep interest rates steady last week, Fed Chair Powell is scheduled to explain the central bank’s views on the economy to legislators when he delivers his periodic testimony to Congress today.

  • Date
  • Author Alessandro Fezzi, LGT Content & Publications
  • Reading time 5 minutes

Strategist Middle East

Asia-Pacific markets advanced on Tuesday after US President Donald Trump announced a ceasefire agreement between Israel and Iran, though Iran has denied the claims. Japan's Nikkei 225 gained 1.6%, South Korea's Kospi surged 2.1%, and Hong Kong’s Hang Seng rose 1.4%.

Wall Street indices rise despite continued Middle East tensions

US stock markets closed higher on Monday, despite geopolitical tensions following Iran’s response to a US attack on its nuclear facilities. The Dow Jones Industrial gained 0.9% to 42,581.78 points, while the S&P 500 and Nasdaq 100 rose 1% and 1.1%, respectively. The gains were attributed to Iran's limited retaliation, which avoided targeting energy infrastructure. IBM shares surged 2.9% to a record high on optimism about its AI potential, while Tesla led the Nasdaq 100 with an 8.2% jump after launching a pilot robotaxi service. Conversely, biotech firm Amgen fell 5.8% after disappointing trial data.

Powell to testify 

Federal Reserve Chair Jerome Powell is set to testify before Congress this week, addressing the House Financial Services Committee today and the Senate Banking Committee on Wednesday. His remarks will provide updates on the central bank's stance on inflation and the economy, with market participants closely monitoring for potential policy signals. Lawmakers, including allies of former President Donald Trump, may challenge Powell on the Fed's cautious approach to lowering interest rates, a stance Trump has criticised amid declining inflation.

Euro-area business sentiment stagnates in June

Business sentiment in the eurozone remained unchanged in June, with the S&P Global Purchasing Managers' Index holding steady at 50.2 points, as reported on Monday. This figure, below analysts' expectations of 50.4, signals only marginal economic growth, remaining just above the 50-point threshold that separates expansion from contraction. Germany saw improvements in both its industrial and services sectors, with services showing unexpectedly strong gains, though both indicators stayed below the expansion threshold. Meanwhile, sentiment in France weakened across industries, reflecting a surprising downturn. Despite challenges, some economists believe German industry may have passed its low point, citing four consecutive months of rising production.

UK business sentiment improves in June

The Purchasing Managers’ Index (PMI) for the United Kingdom, compiled by S&P Global, rose to 50.7 points in June, up from 50.3 points in May, according to preliminary data. This surprise improvement exceeded economists' expectations of 50.5 points and signals a modest expansion in economic activity, as the index remains above the 50-point growth threshold. While manufacturing sentiment improved, it stayed below the expansion level, whereas the services sector further widened its distance above the threshold. Despite the gain, the UK economy remains sluggish, with only disappointing growth anticipated, S&P Global commented.

European markets steady 

European stock markets showed resilience on Monday, remaining close to Friday's closing levels despite US strikes on Iranian nuclear facilities. The EuroStoxx 50 closed 0.2% lower, while the Swiss SMI saw marginal declines of 0.1%. Positive US economic data buoyed sentiment, contrasting with subdued euro-area business activity and a surprising improvement in UK corporate confidence. Novo Nordisk shares fell more than 5% amid mixed analyst views on its obesity drug. Holcim's newly spun-off Amrize debuted on the Swiss market, with its valuation aligning closely to the former combined entity.

Corporate and economic calendar

Corporate news in focus: Quarterly earnings FedEx.

Economic data in focus: Germany’s ifo Business Climate Index (10:00), European Central Bank President Christine Lagarde speaks (15:00), Federal Reserve Chair Jerome Powell testimony (16:00), US Richmond Fed Manufacturing Index (16:00), Canadian Consumer Price Index (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.