U.S. stock markets experienced gains on Tuesday, demonstrating resilience amidst ongoing geopolitical tensions in the Middle East. Market participants appeared undeterred by rising crude oil prices as they awaited critical updates from the Federal Reserve’s FOMC meeting that commenced yesterday. All three major stock indexes ended the day in positive territory.
The Dow Jones Industrial Average (DJIA) increased by 0.1%, closing at 46,993.26. During intraday trading, the index rose nearly 482 points at its high. Among the 30 component stocks, 14 finished positively while 16 were in the red. The tech-heavy Nasdaq Composite saw a notable rise of 0.5% or 105.35 points, closing at 22,479.53. This uptick was driven largely by strong performances from leading technology companies; Western Digital Corp. was a standout, climbing 9.6% and holding a Zacks Rank of #1 (Strong Buy). The Nasdaq’s intraday high marked an increase of over 195 points.
The S&P 500 also recorded a gain of 0.3%, closing at 6,716.09, with all 11 sectors contributing positively. Particularly strong were the Information Technology Select Sector SPDR (XLK), which rose 1.5%, and the Consumer Discretionary Select Sector SPDR (XLY), which increased by 1.2%. The CBOE Volatility Index (VIX), often referred to as the fear gauge, fell by 4.9% to reach 22.37. Trading volume totaled approximately 16.9 billion shares, slightly below the recent average of 19.8 billion. Notably, the S&P 500 recorded 21 new 52-week highs and two new lows, while the Nasdaq saw 51 new highs and 137 new lows.
In the backdrop, geopolitical tensions in the Middle East remained heightened, with Iran continuing its retaliatory actions against U.S.-Israel operations. The primary oil supply route through the Strait of Hormuz faced significant disturbances. President Donald Trump’s initiative to form a coalition of NATO nations to safeguard tanker routes in the Strait has yet to materialize, with many NATO countries reluctant to engage in the conflict.
Oil prices surged as U.S. benchmark West Texas Intermediate (WTI) futures rose by 2.9%, settling at $96.21 per barrel, while international Brent futures climbed 3.2% to end at $103.42 per barrel.
The Federal Reserve’s FOMC meeting is drawing considerable attention, especially with Fed Chairman Jerome Powell expected to present key statements and policy decisions later today. Current market assessments, reflected in the CME FedWatch tool, reveal that a vast majority of market participants—99%—anticipate the Fed funds rate will remain between 3.5% and 3.75%. A minority of 1% predict a potential rate hike of 25 basis points. Expectations for rate cuts appear more distant, with speculation indicating that significant changes may not occur until September. Market observers will closely analyze Powell’s remarks for insights regarding the Fed’s stance on inflation, which continues to exceed the central bank’s 2% target. The ongoing Middle Eastern conflict and fluctuations in oil prices are expected to play a significant role in shaping monetary policy.
Adding to the landscape, the National Association of REALTORS reported that pending home sales experienced a 1.8% uptick in February, contrasting with a Zacks Consensus Estimate predicting a decline. January’s metric was revised downwards from a previously reported -0.8% to -1%. Year-over-year, pending home sales have decreased by 0.8% in February.
