Rally on Eased Israel-Iran Tensions... Nearing All-Time Highs [New York Stock Market Briefing]

With the easing of tensions in the Middle East following the ceasefire between Israel and Iran, the New York stock market surged across the board on the 24th (local time).

On this day, at the New York Stock Exchange, the Dow Jones Industrial Average closed at 43,089.02, up 1.19% from the previous trading day. The S&P 500 index rose 1.11% to 6,092.18, and the NASDAQ Composite Index climbed 1.43% to 19,912.53. Both the S&P 500 and NASDAQ indices approached their all-time highs set in February and last December, respectively.

The stock market regained stability as heightened tensions from US and Israeli strikes on three Iranian nuclear facilities subsided. Previously, there were concerns on Wall Street that if Iran retaliated by blocking the Strait of Hormuz, a major oil transport route, it could lead to a surge in oil prices, global inflation, and a subsequent economic recession.

However, the previous day, Israel and Iran both expressed their intention to honor the ceasefire, stating, "We will not violate the agreement as long as the other party abides by it."

International oil prices plunged for a second consecutive day. On this day, US West Texas Intermediate (WTI) crude futures closed at $64.37 per barrel, down 6%, while the international benchmark Brent Crude futures fell 6.1% to $67.14 per barrel. Previously, on the prior day, WTI futures had plummeted by more than 7%, setting a new intraday low and marking a cumulative two-day decline of 13%.

A signal from US President Donald Trump indicating a possible lifting of Iran sanctions also contributed to the decline in oil prices. Through the social media platform Truth Social, Trump stated, "Now China can continue purchasing oil from Iran" and added, "Hopefully, the United States will buy a large quantity as well."

The price of gold, considered a safe-haven asset, also dropped. On the New York Mercantile Exchange, the nearest-month gold futures closed at $3,333.9 per ounce, down 1.8% from the previous session.

By sector, the major US tech stocks known as the 'Magnificent 7 (M7)' showed mixed performances. Tesla, which surged over 8% the previous day after launching its robotaxi service, fell 2.4% on this day. On the other hand, NVIDIA (2.59%), Microsoft (0.85%), and Amazon (2.06%) all rose.

Defense stocks declined. Lockheed Martin dropped 2.59%, while Northrop Grumman and RTX fell by 3.14% and 2.72%, respectively. Following the ceasefire agreement and a subsequent plunge in oil prices, both United Airlines and Delta Air Lines shares jumped more than 2%.

The stock price of the stablecoin firm Circle, which had been surging, plunged 15.49% on this day. The move was apparently influenced by ARK Investment Management, the prominent US tech-focused investment management firm led by Cathie Wood, selling off part of its investment. ARK Investment Management sold about 1.5 million shares of Circle over the last four trading days, totaling approximately $333 million (about ₩460 billion).

Jungdong Noh, Hankyung.com reporter dong2@hankyung.com