By John Meyer, consultant in financial affairs – Eurasia Business News, June 23, 2025. Article no. 1582
U.S. stocks rose on Monday after Iran launched missiles at a U.S. air base in Qatar in retaliation for American strikes on Iranian nuclear facilities.
Major indexes posted gains: the S&P 500 climbed approximately 0.7%, the Dow Jones Industrial Average rose by 0.6%, and the Nasdaq increased by about 0.9%.
Oil prices, which initially spiked on fears of supply disruption, reversed sharply and fell by over 6–7% as the day progressed. Brent crude futures dropped below $72 per barrel, and WTI crude fell to around $68.
One explanation for the relatively limited reaction is markets have already priced in a high degree of uncertainty about the Middle East: Brent crude futures settled at around $77 late Friday, up from below $70 before Israel first struck Iran.
On June 22, oil prices surged by approximately 11% amid escalating conflict between Iran and Israel, driven by fears of supply disruptions and broader geopolitical risks in the Middle East.
Why Did Stocks Rise and Oil Fall?
The Iranian missile strikes were seen as a measured response, matching the scale of U.S. attacks and causing no reported casualties, which reassured investors that the conflict might not escalate further.
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Initial concerns about a potential blockade of the Strait of Hormuz—a critical route for global oil shipments—faded as Iran’s retaliation appeared limited and did not disrupt energy supplies.
U.S. officials, including Energy Secretary Chris Wright, downplayed the risk of a major supply shock, further easing market anxiety.
Investor Sentiment and Market Dynamics
Investors shifted from early caution to optimism, viewing the limited scope of Iran’s response as reducing the risk of a broader regional conflict or significant oil supply disruption.
The stock market’s positive turn was also supported by Federal Reserve commentary suggesting possible interest rate cuts as soon as July, boosting risk appetite.
Gold prices saw a modest increase, reflecting some demand for safe-haven assets amid lingering geopolitical uncertainty. The gold market continues to consolidate within an elevated range between $3,350 and $3,400 an ounce.
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Meanwhile, Treasury yields fell after Federal Reserve governor Michelle Bowman said Monday she could support a July interest-rate cut. Following similarly dovish remarks last week from another Fed governor, Christopher Waller, Bowman’s comments were a sign that support is building for a looser monetary stance.
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© Copyright 2025 – Eurasia Business News. Article no. 1582.
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