Market Update: 24th June: Ceasefire Lifts Markets While Powell Prepares for the Hot Seat

Markets are breathing a sigh of relief this morning. After weeks of simmering geopolitical tension, investors have welcomed news of a ceasefire between Israel and Iran a development that has ignited a global risk rally. At the same time, traders are keeping a close eye on Washington, where Federal Reserve Chair Jerome Powell is set to testify before Congress in what may become one of his most closely watched appearances to date.

Let’s break down what’s moving markets today and what it means for investors.

Geopolitics Cool Off: Ceasefire Fuels a Relief Rally

Former President Trump took to the airwaves last night to declare what he called a “forever ceasefire” between Israel and Iran. Whether the truce holds is anyone’s guess, but for now, the market is embracing the de-escalation.

Oil prices tumbled sharply on the news, with Brent crude falling over 3% a dramatic shift that reflects lower perceived risk to Middle Eastern supply lines. That’s good news for inflation, and even better news for central banks that have been stuck in a tug-of-war between sticky prices and slowing growth.

Global equities surged in response. European benchmarks like the DAX and CAC rose nearly 2% in early trade, while U.S. futures are firmly in the green. The S&P 500 is poised to test recent highs, and risk assets across the board are getting a lift.

Eyes on Powell: What Will He Say to Congress?

While geopolitical headlines provide short-term oxygen to markets, the bigger and more enduring catalyst today is Jerome Powell’s testimony before Congress.

The Fed Chair is expected to defend the central bank’s cautious stance on interest rates, despite mounting political pressure. Former President Trump has been anything but subtle, demanding deep rate cuts and calling Powell “dumb” and “hardheaded.” Markets, for their part, are pricing in about a 23% chance of a rate cut in July a noticeable uptick from just weeks ago.

Fed watchers will be listening closely for any hint of a dovish pivot. Powell is walking a tightrope: acknowledge easing inflation without fuelling excessive speculation. A single misstep could send bond yields tumbling or spiking.

Final Word: Calm Before the (Next) Storm?

Today’s market tone feels optimistic perhaps overly so. While the ceasefire offers near-term relief, the geopolitical landscape remains fragile. And while Powell might not rock the boat today, political and economic pressure is building. Investors would be wise to enjoy the rally, but not to get too comfortable. The Fed may not be as close to cutting as markets hope.

Till next time, all of you trade safe!

By James Trescothick

Head of Market Research and Analysis

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