Daily Market Summary – Jun 24th

Middle East Ceasefire Eases Market Tensions

The most consequential development of the day was the announcement of a ceasefire between Israel and Iran, brokered by former U.S. President Donald Trump. This truce, following weeks of escalating military actions including missile strikes and retaliatory bombings, significantly eased geopolitical tensions in the Middle East. The ceasefire had immediate and far-reaching effects on global markets. Oil prices plummeted, with Brent crude falling over 7% to around $68 per barrel and West Texas Intermediate dropping to $65, as fears of supply disruptions through the Strait of Hormuz subsided. The decline in oil prices also alleviated inflationary pressures, which had been a growing concern for central banks and investors alike. Stock markets responded positively, with the Dow, S&P 500, and Nasdaq all posting gains, led by technology and consumer discretionary sectors. The Nasdaq, in particular, surged to near-record levels, buoyed by investor optimism that the ceasefire would hold and prevent further economic fallout.

Fed Maintains Cautious Stance on Rate Cuts

In tandem with the geopolitical developments, Federal Reserve Chair Jerome Powell testified before Congress, maintaining a cautious stance on interest rate cuts. Powell emphasized the need for more data on inflation and the economic impact of recent tariffs before making any policy changes. Despite pressure from President Trump and some Fed officials advocating for immediate rate reductions, Powell reiterated the Fed's independence and commitment to its dual mandate of price stability and maximum employment. His remarks, coupled with dovish signals from other Fed officials like Michelle Bowman, who suggested a rate cut could be considered in July, contributed to a decline in Treasury yields and the U.S. dollar. Investors interpreted the Fed's tone as a sign that monetary policy could become more accommodative if inflation remains subdued and geopolitical risks persist.

Crypto Market Rallies on Ceasefire and Regulation

The cryptocurrency market also rallied on the back of the ceasefire and regulatory developments. Bitcoin and other major cryptocurrencies like Ethereum and Solana saw gains of around 2%, while Coinbase shares surged over 12%, reaching a new 52-week high. The rally was further fueled by the Senate's passage of the GENIUS Act, which provides regulatory clarity for stablecoins. This legislation is expected to unlock significant growth in the U.S. stablecoin market, potentially reaching $2 trillion. Mastercard and Fiserv announced partnerships to integrate stablecoins like PYUSD and FIUSD into their payment networks, signaling growing institutional adoption. However, the Bank for International Settlements issued a stern warning about the risks of stablecoins, urging central banks to accelerate the tokenization of their currencies to maintain monetary sovereignty and financial stability.

Tech Stocks Surge on AI Momentum

In the technology sector, Nvidia continued its ascent, with shares rising over 2% to approach record highs. CEO Jensen Huang's leadership and strategic pivot toward AI and accelerated computing have positioned Nvidia as a global powerhouse, with its market value rivaling the most valuable companies in the world. The company's success underscores a broader trend in the semiconductor industry, where stocks like AMD, Broadcom, and Intel also posted gains amid strong demand for AI-related hardware. JPMorgan forecasted a 15%-20% rally in Asian tech stocks, driven by AI momentum, with top picks including Taiwan Semiconductor and SK Hynix. Meanwhile, Tesla's launch of its first driverless robotaxi service in Austin, Texas, sent its stock up 8.2%, although safety concerns and regulatory scrutiny remain significant hurdles.

Amazon Expands UK and U.S. Operations

Amazon made headlines with its announcement of a £40 billion ($54 billion) investment in the UK over the next three years. The investment will expand its cloud computing and AI infrastructure, build new fulfillment centers, and create thousands of jobs. UK Prime Minister Keir Starmer hailed the move as a vote of confidence in Britain's economic policies. Amazon's shares rose 2% in premarket trading following the announcement. In a separate development, Amazon also committed over $4 billion to expand its Same-Day and Next-Day delivery services across 4,000 rural U.S. cities and towns by 2026, aiming to meet growing demand and create new jobs.

Senate Republicans Push for Permanent Tax Cuts

In the financial sector, Senate Republicans are pushing to make the 2017 tax cuts permanent using a reconciliation process that could add $3.8 trillion to the federal deficit over a decade. This maneuver, which assumes current tax policies remain indefinitely, has drawn criticism from economists who warn it could erode investor confidence and worsen the U.S. fiscal trajectory. The bill includes permanent business tax breaks and cuts to Medicaid, while limiting tax breaks on tipped wages and overtime pay. Meanwhile, six investment groups urged Senate Republicans to exempt passive income from a proposed tax bill targeting foreign investors, warning it could disrupt U.S. debt and equity markets.

Energy Sector Sees Mixed Signals

The energy sector saw mixed developments. While oil prices fell sharply due to the ceasefire, LNG freight rates surged to an eight-month high amid tight vessel availability and increased shipments to Asia. The Israel-Iran conflict had raised concerns about the Strait of Hormuz, a critical chokepoint for global oil and gas flows. Despite the easing of tensions, analysts warned that any renewed hostilities could quickly reverse the current market calm. In the U.S., oil producers rushed to hedge higher prices during the brief spike, locking in gains before prices retreated. The U.S. economy, now a net oil exporter, is more resilient to oil shocks than in the past, but analysts caution that a prolonged conflict could still impact inflation and consumer spending.

Carnival and Uber Lead Travel Sector Gains

In corporate news, Carnival Corporation reported record second-quarter results, surpassing 2026 financial targets 18 months early and raising its full-year profit forecast. The cruise line achieved $6.3 billion in revenue and tripled its adjusted net income from the previous year, driven by strong demand and onboard spending. Shares of Carnival, Norwegian Cruise Line, and Royal Caribbean all rose, signaling a robust recovery in the travel and leisure sector. Similarly, Uber's stock jumped 7.2% after expanding its autonomous ride-hailing services with Waymo to Atlanta, marking progress in integrating self-driving technology into its platform.

AI Startups Attract New Funding

The AI sector continues to attract significant investment. Eventual, a startup focused on unstructured data infrastructure, raised $27.5 million to enhance its open-source platform Daft, which processes multimodal data like text, audio, and video. Meanwhile, BackOps secured $6 million to automate logistics workflows, and Pangram raised $4 million to improve AI-text detection tools for schools and businesses. These developments reflect the growing demand for AI solutions across industries, from logistics to education and content moderation.

Housing Market Mixed Amid High Rates

In the housing market, KB Home exceeded second-quarter revenue and profit estimates but lowered its full-year sales forecast due to weaker-than-expected spring demand and high mortgage rates. The company cited affordability challenges and consumer uncertainty as key factors. Despite the mixed results, analysts maintained a 'buy' rating, noting favorable conditions for homebuilder stocks. In contrast, the commercial real estate market in San Francisco is showing signs of recovery, with increased office attendance and investor interest in multifamily properties.

Regulators Target Big Tech and Banks

On the regulatory front, the UK's Competition and Markets Authority is considering designating Google with 'strategic market status' under the new Digital Markets Competition Regime. This would require Google to offer alternative search options and fairer content usage terms, aiming to increase competition and innovation in the UK tech sector. In the U.S., the Federal Reserve is considering a rollback of bank capital rules, specifically the enhanced supplementary leverage ratio, to facilitate easier lending and increase demand for U.S. Treasuries. This move is part of a broader deregulatory effort supported by the Trump administration.

Supply Chain Innovation Accelerates

Finally, the global supply chain is undergoing a transformation driven by tariffs, trade restrictions, and emerging technologies. Companies are increasingly adopting AI, digital twins, and computer vision to enhance efficiency and resilience. The U.S. digital twin market is projected to grow from $3 billion in 2023 to $36 billion by 2028, while the AI computer vision market could reach $63.48 billion by 2030. These technologies are being used to optimize logistics, reduce costs, and improve decision-making across industries.