FRANKFURT, Germany (AP) 鈥� Stocks rallied and oil prices fell Tuesday after U.S. President Donald Trump in the Israel-Iran war.
The tentative truce proposed by Trump remained uncertain after Israel said Iran had launched missiles into its airspace less than three hours after the ceasefire went into effect. It vowed to retaliate.
Still, investors took heart after Trump said Israel and Iran had agreed to a 鈥渃omplete and total ceasefire鈥� soon after Iran launched Monday on a U.S. military base in Qatar, retaliating for the American bombing of its nuclear sites over the weekend.
鈥淭he Middle East may still be smoldering, but as far as markets are concerned, the fire alarm has been shut off,鈥� Stephen Innes of SPI Asset Management said in a commentary.
The future for the S&P 500 gained 0.8% while that for the Dow Jones Industrial Average rose 0.7%. In morning trading Europe time, Germany鈥檚 DAX leaped 1.8% to 23,693.13, while the CAC 40 in Paris added 1.2% to 7,625.20. Britain鈥檚 FTSE 100 was up 0.3% at 8,784.68.
Oil prices fell further, after tumbling on Monday as fears subsided of an Iranian blockade of the , a vital waterway for shipping crude. Oil prices have now given up almost all their gains since Israel attacked Iran on June 13, wiping out a roughly $10 per barrel risk premium based on the outside chance of a blockade at the strait.
The price of oil initially jumped 6% after trading began Sunday night, a signal of rising worries as investors got their first chance to react to the U.S. bombings. But it quickly shed all those gains, with U.S. benchmark crude falling 7.2%. It dropped further early Tuesday, giving up 3% to $66.49 per barrel. It had briefly topped $78.
Brent crude, the international standard, shed 3% early Tuesday to $69.38. That was just a few cents above where it traded on June 12 ahead of the Israeli attack on Iran.
With the global oil market well supplied and the OPEC+ alliance of producing countries steadily increasing production, oil prices could be headed down, said Carsten Fritsch, commodities analyst at Commerzbank. 鈥淭he crucial question now is whether the ceasefire will hold and a lasting peace solution can be found," he wrote in a research note. 鈥滻f so, a further fall in the oil price could be expected."
At their next meeting July 6, ministers from eight OPEC+ countries are expected to add another 410,000 barrels per day of production.
In Asia, Tokyo's Nikkei 225 rose 1.1% to 38,790.56 and the Hang Seng in Hong Kong gained 2.1% to 24,177.07.
The Shanghai Composite index climbed 1.2% to 3,420.57.
In South Korea, the Kospi jumped 3% to 3,103.64, while Australia's S&P/ASX 200 gained 1% to 8,555.50.
Taiwan's Taiex rose 2.1% and India's Sensex was up 0.6%. In Bangkok, the SET surged 2.5%.
U.S. stocks rallied on Monday despite the United States鈥� into .
The S&P 500 climbed 1% and the Dow industrials gained 0.9%. The Nasdaq composite index advanced 0.9%.
Back in the U.S., Treasury yields eased after rates at the Fed鈥檚 next meeting, as long as 鈥渋nflation pressures remain contained.鈥�
Investors will be watching for Fed. Chair Jerome Powell's comments to the U.S. Congress later Tuesday, analysts said. when d
The yield on the 10-year Treasury held steady at 4.33% from 4.38% late Friday. The two-year Treasury yield, which more closely tracks expectations for the Fed, dropped to 3.83% from 3.90%.
The Federal Reserve has been this year because it鈥檚 waiting to see how much will hurt the U.S. economy and raise inflation.
has remained recently, but higher oil and gasoline prices would push it higher. That could keep the Fed on hold because cuts to rates can fan inflation while they also give the economy a boost.
The U.S. dollar fell to 145.13 Japanese yen from 146.15 yen late Monday. The euro rose to $1.1597 from $1.1578.
David Mchugh And Elaine Kurtenbach, The Associated Press
