Stock Market Rallies 1.75% as Iran Deal Hopes Ease Tensions, June 12

U.S. stocks rallied sharply on Thursday after President Trump canceled planned military strikes against Iran and signaled a peace deal was imminent. The S&P 500 gained 1.75% to close at 7,394.30, while the Nasdaq Composite added 2.54% to 25,809.66. Oil prices fell 2.58% to $87.71 per barrel as geopolitical risk eased. The market rebound came despite wholesale inflation data showing pipeline pressures building.

Trump Signals Peace Deal, Markets Rally

President Trump announced he had canceled scheduled strikes against Iran and said the U.S. would soon sign a deal with Tehran. Trump told reporters that “we have a deal that Iran will never have a nuclear weapon” and that “documents are in pretty final shape.” The Dow Jones Industrial Average rose 929.97 points, or 1.86%, to close at 50,848.75. Chip stocks rebounded sharply after two days of heavy selling, with the semiconductor sector recovering from recent losses.

Oil Prices Drop as Geopolitical Risk Fades

West Texas Intermediate crude futures fell 2.58% to settle at $87.71 a barrel, while Brent crude tumbled 2.92% to end at $90.38 a barrel. Both contracts continued declining after the settlement. The sharp drop reflected investor relief that military escalation had been avoided. Oil had spiked earlier in the week when Trump threatened strikes on Iranian oil infrastructure.

Wholesale Inflation Surges, Keeping Fed on Hold

Producer prices rose 1.1% in May, well above the 0.7% consensus forecast, putting the 12-month wholesale inflation rate at 6.5%, the highest since November 2022. Energy prices drove nearly 80% of the gain, with gasoline surging 23.4% at the wholesale level. Core prices excluding food and energy accelerated 0.4%, signaling that energy shocks are the primary inflation driver. The Federal Reserve is expected to hold interest rates steady at its June meeting, with market pricing showing near 100% probability of no change.

SpaceX Prices Record IPO at $135 per Share

SpaceX priced the largest initial public offering in U.S. history at $135 per share, raising $75 billion and valuing the company at $1.78 trillion. The company sold 555.56 million shares in the offering. Shares are set to begin trading on Friday, with investors’ expectations running high for a significant first-day gain. The IPO overshadows other market moves as Wall Street prepares for the debut.

Final Thoughts

The stock market’s 1.75% gain reflects relief from geopolitical risk rather than economic strength. With producer prices at a three-year high and the Fed on hold, the rally depends on sustained peace in the Middle East and no further inflation surprises.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.