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 InstaForex
© 2007-2025
Summary
Urgency
Analytic
Igor Kovalyov
Start trade
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

AUD/JPY. Analysis and Forecast

Today, Tuesday, during the European session, the AUD/JPY pair reached the round level of 97.00. The yen continues to show relative weakness amid growing expectations that the Bank of Japan

Irina Yanina 12:44 2025-07-15 UTC+2

EUR/USD. Analysis and Forecast

On Tuesday, the EUR/USD pair is gaining positive momentum, recovering from more than two weeks of declines triggered by Trump's threat to impose new tariffs. On Saturday, Trump announced plans

Irina Yanina 12:30 2025-07-15 UTC+2

The European Union Finalizes Second List of Countermeasures

The European Union has finalized its second list of countermeasures against U.S. goods, totaling 72 billion euros. This step comes in response to the ongoing trade tensions between

Jakub Novak 11:25 2025-07-15 UTC+2

Trump's Actions Alarm Germany

While the euro remains relatively stable, German Chancellor Friedrich Merz is not feeling as confident. In a recent interview, he stated that U.S. President Donald Trump's threat to impose 30%

Jakub Novak 11:11 2025-07-15 UTC+2

Rising Inflation in the U.S. Will Decrease the Likelihood of Fed Rate Cuts (Possible Resumption of USD/CAD and Bitcoin Growth)

While President Donald Trump continues playing his favorite game called "Make America Great Again," market participants are calculating the cost of U.S. trade wars with nearly the entire world

Pati Gani 09:58 2025-07-15 UTC+2

The Market Will Break Out of Its Cage

Deep down, markets still believe tariffs could become an inflationary force. However, without confirmation from official data, investors are not ready to sell the S&P 500. They've grown accustomed

Marek Petkovich 09:14 2025-07-15 UTC+2

What to Pay Attention to on July 15? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are scheduled for Tuesday. The key report of the day is, of course, the U.S. Consumer Price Index (CPI). Why is it important? At the moment, inflation

Paolo Greco 07:27 2025-07-15 UTC+2

GBP/USD Overview – July 15: U.S. Budget Turns Surplus — What's Next?

The GBP/USD currency pair continued to trade lower on Monday, despite the lack of any strong fundamental reasons for such a move. Of course, one can always find or even

Paolo Greco 03:58 2025-07-15 UTC+2

EUR/USD Overview – July 15: No Agreement Signed with the EU. Mexico Gets Caught in the Crossfire

The EUR/USD currency pair traded very calmly throughout Monday, as the market continued to ignore Trump's tariff hikes. If the euro remains flat while the British pound is actively falling

Paolo Greco 03:58 2025-07-15 UTC+2

The Budget Is Now in Surplus, but the National Debt Isn't Falling

Last Friday, the U.S. Treasury Department announced the first budget surplus since 2017. Many in the market may have interpreted this as great news for the dollar

Chin Zhao 00:48 2025-07-15 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

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 InstaForex anyway.

We are sorry for any inconvenience caused by this message.