Stocks cautiously ground higher as oil prices fluctuated around their currently elevated levels. The situation in the Middle East continues without obvious signs of de-escalation. While NATO allies have declined to join the U.S. and Israel in Operation Epic Fury, the losses among high-level officials on the Iranian side demonstrate significant military inferiority for Iran. The Iranian strategy has been widely considered a play of economy and attrition, utilizing equipment and tactics that have drastically lower costs compared to those of the U.S. and Israeli forces, as well as closing the Strait of Hormuz to manufacture a global energy crisis in the hope that the military operation conducted by the U.S. becomes politically expensive to continue. As a result, it is unlikely that the Strait of Hormuz will reopen until a ceasefire has been reached.
The market looked through the ongoing conflict and recouped some of the losses from prior days. The Dow Jones Industrial Average rose 47 points to 46,993. The NASDAQ advanced 0.51% to 24,780. The S&P 500 inched up 0.25% to 6,716.
The bond market also saw some relief. Both the 5-year and 10-year U.S. Treasury yields declined by 2 basis points to 3.79% and 4.2%, respectively.
Looking domestically, today’s pending home sales showed an unexpected climb as buyers took advantage of lower mortgage rates and slower price growth, which is welcoming news for the real estate market.
Tomorrow, we will see an interest-rate decision. The market largely expects the interest rate to remain unchanged but is uncertain about how hawkish the Federal Reserve will be in its guidance for the rest of the year. We at Adams Wealth Advisors will pay close attention to tomorrow's press conference and provide you with updates. Thank you for listening.