Stocks rose while oil prices fell on Tuesday morning, as investors bet that a delicate ceasefire between Israel and Iran would hold.
The Dow Jones Industrial Average climbed 305 points, or 0.7%. The S&P 500 gained 0.7%, and the Nasdaq Composite advanced 1%.
Oil prices were sharply lower for a second-straight day. U.S. crude oil slipped more than 4%, alongside international benchmark Brent. A day earlier, U.S. crude oil fell more than 7%.
Airline stocks were higher as oil pulled back, with shares of United Airlines, Frontier and Delta all climbing more than 2%. Broadcom and Nvidia advanced 4% and 1%, respectively, as investor appetite for risk grew.
These moves come as President Donald Trump tried to salvage a fragile ceasefire between Israel and Iran that took effect early Tuesday morning. Both sides have accused the other of violating the agreement. Israeli forces said a radar system close to Iran’s capital city Tehran was attacked. CNBC has not independently verified the report from Israeli army radio station GLZ.
Trump said on Truth Social that “ISRAEL is not going to attack Iran,” and added that the ceasefire is still in effect. The president earlier expressed frustration toward both Israel and Iran for breaking the agreement by saying he was “unhappy” with both sides.
“The market response to the escalation and subsequent ceasefire hopes aligns with our view that geopolitical shocks have tended to have a temporary impact on global financial markets, and that investors are likely to refocus on fundamentals,” Solita Marcelli, UBS Global Wealth Management chief investment officer Americas, wrote Tuesday. “We continue to believe solid fundamentals will help lift equities over the next 12 months.”
Tuesday’s gains added to Monday’s strong advances. The major averages jumped Monday after Qatar’s Defense Ministry said that its air defense had intercepted Iran’s retaliatory strike on a U.S. military base.
Investors also parsed fresh commentary from Federal Reserve Chairman Jerome Powell before the House Financial Services Committee. Powell signaled that the central bank is in no rush to cut interest rates and will wait to see how Trump’s tariffs impact the economy.
Powell’s appearance on Capitol Hill comes at a pivotal time: He is facing an aggressive push from the White House to cut rates — and in recent days two Fed officials have said they could see a case for dialing back policy as early as July.
—CNBC’s Jeff Cox contributed reporting.
Stocks open higher
Stocks opened higher on Tuesday as oil fell, with investor risk appetite growing on hopes that the ceasefire between Israel and Iran will hold.
The S&P 500 added 0.6%, while the Nasdaq Composite gained 0.9%. The Dow Jones Industrial Average climbed 282 points, or 0.6%.
— Brian Evans
HSBC upgrades Broadcom to buy, sees near 60% upside
Broadcom shares jumped 2.5% in premarket trading Tuesday after HSBC upgraded the semiconductor stock to a buy rating from hold.
The Wall Street firm said it has become bullish on its business in Application-Specific Integrated Circuits (ASICs).
“We turn positive on Broadcom as we now believe its ASIC revenues will significantly beat market expectations from better ASIC project visibility as well as ASP pricing power,” HSBC said in a note to clients.
The firm also hiked its price target drastically to $400 from $240 previously. The new forecast represents a whopping 58% upsize from the stock’s Monday close of $253.77.
— Yun Li
Powell tells Congress rate cuts can wait
Federal Reserve Chair Jerome Powell indicated Tuesday he is in no hurry to cut interest rates as central bank officials wait for the impact of tariffs on inflation to play out.
Policymakers are “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance,” the central bank leader said in remarks he will present to two congressional committees this week.
“Policy changes continue to evolve, and their effects on the economy remain uncertain,” Powell said amid ongoing criticism from President Donald Trump, who wants the Fed to cut rates aggressively.
Powell will present the speech then take questions from the House Financial Services Committee starting at 10 a.m. ET.
—Jeff Cox
Stocks making the biggest moves premarket
Check out the companies making headlines before the bell:
Carnival — The cruise line added nearly 3% ahead of its anticipated second-quarter financial report. Analysts are expecting earnings of 24 cents per share on revenue of $6.21 billion, according to FactSet.
Chewy — The pet-focused ecommerce retailer dropped 1.5% after a secondary sale of $1 billion in new Class A shares through JPMorgan. Chewy also authorized the repurchase $100 million of its stock.
Defense stocks — Defense stocks fell after U.S. President Donald Trump said Tuesday a ceasefire in the Iran-Israel conflict is in effect. Shares of Lockheed Martin and RTX dipped more than 1% each.
— Sarah Min
Goldman downgrades Dollar General
Goldman Sachs doesn’t see much more room in Dollar General‘s recovery run.
Analyst Kate McShane downgraded the value retailer to neutral from buy. McShane’s $116 price target implies 0.9% in upside over Monday’s close.
“DG’s management team has worked hard to improve the company’s positioning through its Back to Basics program, which has resulted in better comp trends and improved margins,” McShane wrote to clients. “While we think the company still has room for margin improvement over the long term, we think the stock is now pricing in its better fundamentals.”
Dollar General shares have rallied more than 30% in the second quarter, brining its year-to-date gain above 50%. That comes after the stock dropped more than 44% in both 2023 and 2024.
Shares ticked about 1% lower before the bell on Tuesday following the downgrade.
— Alex Harring
Trump says he’s ‘unhappy’ with Israel and Iran as Middle East ceasefire is broken just hours after it took effect
President Donald Trump said he’s “unhappy” with the deteriorating ceasefire between Iran and Israel, which was breached merely hours after its initial agreement.
“I’m not happy with them. I’m not happy with Iran either but I’m really unhappy if Israel is going out this morning,” Trump told a reporter pool while en route to the NATO summit in the Hague.
Follow live updates here.
— Brian Evans
Trump blasts Powell ahead of Fed chief’s Capitol Hill testimony
President Donald Trump took another shot Tuesday at Federal Reserve Chair Jerome Powell ahead of the central bank leader’ testimony this week on Capitol Hill.
In an early morning post on Truth Social, Trump said he hoped “Congress really works this very dumb, hardheaded person, over. We will be paying for his incompetence for many years to come.”
A Trump appointee, Powell has come under the president’s criticism for his leadership at the Fed, which has held its key interest rate in a target range of 4.25%-4.5% since December. Trump contends that with tariffs seeming to have little impact on inflation, the Fed should be cutting aggressively.
However, Powell last week said policymakers believe they have time to watch as conditions develop in coming months.
“No inflation, great economy – We should be at least two to three points lower. Would save the USA 800 Billion Dollars Per Year, plus. What a difference this would make,” Trump said.
—Jeff Cox
Markets still vulnerable to Iran-Israel escalation, Barclays warns
Despite a ceasefire being put in place, equity markets may not be in the clear, according to Barclays.
“Middle East conflict poses acute risks; markets could react sharply to Iran-Israel escalation, which could then spark Vol Control/CTA de-risking,” strategist Venu Krishna wrote. “Vol Control funds have steadily doubled up their equity exposure from Apr lows to ~45% now. While it still pales in comparison to the YTD highs of 80+%, the spillover of macro shocks from the Middle East into higher equity volatility presents a clear risk.”
— Fred Imbert
Energy was the only sector to end Monday negative
The energy sector fell 2.51% on Monday, making it the only one to end the session negative. Oil prices fell as investors appeared to look past a retaliatory strike from Iran on a U.S. military base in Qatar.
All of the 10 other sectors rose on Monday, led by consumer discretionary, which added 1.75%.
The consumer discretionary, energy, materials and health care sectors all remain more than 10% off their 52-week highs.
— Christopher Hayes, Lisa Kailai Han
Stock futures rise after Trump announces ceasefire timeline between Israel and Iran
Stock futures took a leg higher after President Donald Trump took to social media to announce a ceasefire timeline he said will begin around midnight Tuesday and end the war between Israel and Iran.
“It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE (in approximately 6 hours from now, when Israel and Iran have wound down and completed their in progress, final missions!), for 12 hours, at which point the War will be considered, ENDED!” the president wrote in a Truth Social post. “On the assumption that everything works as it should, which it will, I would like to congratulate both Countries, Israel and Iran, on having the Stamina, Courage, and Intelligence to end, what should be called, ‘THE 12 DAY WAR.'”
Representatives for Israel and Iran did not immediately appear to confirm the agreement.
Prior to Trump’s announcement, stock futures had been trading around the flatline.
— Kevin Breuninger, Lisa Kailai Han
Stocks making the biggest moves after the bell: KB Home, Chewy
These are the stocks moving the most in extended-hours trading:
- KB Home — The homebuilding stock slipped 2% after KB Home lowered its full-year housing revenues guidance to the range of between $6.3 billion to $6.5 billion. Previously, the company had predicted a range of between $6.6 billion to $7 billion. Shares fell despite KB Home posting a second-quarter earnings and revenue beat.
- Chewy — Shares fell 3% after the pet food and products retailer announced an underwritten public offering of $1 billion of its Class A common stock through JPMorgan. Concurrently, Chewy also agreed to a $100 million share repurchase program.
— Lisa Kailai Han
Stock futures are little changed
Stock futures traded near flat Monday night.
Futures tied to all three major averages were trading around the flatline shortly after 6 p.m. ET.
— Lisa Kailai Han
