Stocks Rally on Middle East Ceasefire and Fed Comments, Nasdaq Hits Record High

Market Surge Amidst Easing Geopolitical Tensions

• 📈 Stocks rallied with the S&P 500 closing up 1.1% and the Nasdaq 100 reaching a new record high, surpassing its February 18th mark.
• 💡 The market surge was driven by easing concerns in the Middle East following a ceasefire agreement, despite preliminary reports questioning the extent of damage to nuclear enrichment capabilities.
• 📉 Oil prices plunged nearly 15% over two sessions, with West Texas Intermediate settling around $64 a barrel, as President Trump signaled a desire to keep oil flowing from Iran.

Federal Reserve and Interest Rate Outlook

• 💬 Fed Chair Jerome Powell indicated that rate cuts are possible sooner rather than later if inflation remains contained, but stressed there is no rush due to a strong economy.
• 📊 Money markets are now fully pricing in two Fed cuts by the end of 2025, with a September cut being the most likely scenario.

Sector Performance and Key Stock Movers

• 🚀 Technology, financials, and communications services were the best performing sectors, each gaining at least 1.4%.
• 🚢 Carnival was a top performer, rising about 7% after boosting its full-year adjusted earnings per share forecast.
• 💡 Advanced Micro Devices (AMD) saw a significant gain of nearly 7%, following an analyst upgrade on its AI chip progress.
• 🚗 Uber Technologies gained over 7% by launching its driverless Waymo rides in Atlanta, its second market for the service.

Notable Declines and After-Hours Trading

• ⚠️ Tesla shares fell 2.35%, with U.S. auto safety regulators investigating incidents where its self-driving robotaxis appeared to violate traffic laws.
• 📦 FedEx shares moved lower in after-hours trade despite beating earnings estimates, due to guidance for flat to 2% revenue growth in the first quarter and uncertainty about global demand.
• 🛡️ Defense stocks, including RTX (formerly Raytheon), declined as Middle East tensions cooled.
• 🌐 Circle Internet shares fell over 15% after being initiated with a neutral recommendation amid expected increased competition.

Bond Market and Economic Commentary

• 📊 The bond market was well-bid, with both front-end and back-end yields declining, aided by Powell's lack of new news and a strong Treasury auction.
• ⚠️ Fed Governor Michael Barr noted that tariffs could lead to persistent inflation due to second-round effects.
• 💼 A former CFA Institute executive was charged with embezzling millions, highlighting ethical concerns within financial professions.