This week started off with a sharp rebound in stocks. A social media post from the U.S. President stating that the U.S. and Iran had a very productive conversation over the weekend about de-escalation suggested a dialing down of military action in the Middle East. Although Iran later disputed whether truce talks had taken place, the market reacted positively, as many analysts have stated that further escalation could be politically expensive for the current administration.
All major U.S. indices ended the day in the green, and oil prices took a deep dive. The Dow Jones Industrial Average soared 631 points to 46,208. The NASDAQ and S&P 500 both gained more than one percent, to 24,189 and 6,581, respectively. Every sector ended the day higher in the broad-based rally.
The bond market also cheered on. Both the U.S. 5-year and 10-year Treasury yields slipped by 4 basis points to 3.97% and 4.35%, respectively. Gold continued its selloff and is down more than 3.5%, reaching the 4,400 mark. This is among the hardest one-week selloffs in gold in much of modern history.
Without meaningful economic data, we turn our attention to speeches from Federal Reserve officials that took place over the weekend and today. On Saturday, Federal Reserve Chair Jerome Powell lauded the policy record of the late Fed Chair Paul Volcker, who famously raised interest rates and sparked a recession to tame the high inflation of the 1970s. Austan Goolsbee, the president of the Federal Reserve Bank of Chicago, also took a hawkish tone on monetary policy. Fed Governor Stephen Miran, who worked for the White House under the President until his confirmation to the Fed Board, continued to hold to his outlook of four rate cuts in 2026.
There will be some manufacturing reports tomorrow, and we will continue to bring you updates on the latest market events. This is Adams Wealth Advisor.