01:44 PM EDT, 06/24/2025 (MT Newswires) -- US equity indexes rose as investors grew increasingly optimistic that a sustained ceasefire in the Middle East could help keep crude oil from spiking inflation, a metric the Federal Reserve is watching closely to decide when to restart easing policy.

The Nasdaq Composite gained 1.5% to 19,922.3, the S&P 500 advanced 1.1% to 6,092.2, and the Dow Jones Industrial Average traded 1.1% higher at 43,051.7 after midday Tuesday. Financials, technology, and communication services led the gainers, while energy was the sole decliner intraday.

A 6% plunge in West Texas Intermediate crude futures to $64.38 a barrel reduced the risk of geopolitics undermining the Fed's efforts to bring inflation below its 2% target. The slump extended a broader pullback in oil prices from Monday's highs after Iran's missile strike on US assets in Qatar was deemed largely symbolic and failed to inflict casualties, calming market nerves.

Adding to the risk-on tone, US President Donald Trump publicly confirmed that Israel would refrain from new strikes on Iran, reinforcing confidence that the fragile ceasefire he has brokered would hold. The assurance helped unwind safe-haven bets, sending gold futures 1.9% lower to $3,331.05 per ounce.

"ISRAEL is not going to attack Iran," Trump said in a message on Truth Social. "All planes will turn around and head home, while doing a friendly 'Plane Wave' to Iran. Nobody will be hurt, the Ceasefire is in effect!"

Investors also drew encouragement from remarks by Fed Chair Jerome Powell, who signaled the central bank remains attuned to downside risks. Addressing the House Financial Services Committee on the first day of his congressional testimony, Powell said that if inflation comes in lower than expected or the labor market weakens, an interest-rate cut could arrive sooner than markets currently anticipate.

Fed is "well-positioned" to wait and assess incoming data, Powell said in his prepared remarks. He added that balancing the central bank's dual mandates remains critical as the path of inflation normalizes.

Yields on US Treasury edged down amid growing expectations of monetary easing. The 10-year yield fell 2.6 basis points to 4.3% and the 2-year yield declined 1.7 basis points to 3.81%, further flattening the curve.

According to the FedWatch Tool, the probability of two rate cuts by the end of this year is 40%. The likelihood of one reduction is 15% while the chance for three is 37%.

On the macro front, the Conference Board's measure of consumer confidence fell to 93.0 in June from 98.4 in May, compared with the 99.8 print expected in a Bloomberg-compiled survey. "Their [consumers'] appraisal of current job availability weakened for the sixth consecutive month but remained in positive territory, in line with the still-solid labor market," said Stephanie Guichard, senior economist at The Conference Board.

The Richmond Fed's monthly manufacturing index improved to minus 7 in June from minus 9 in May, versus minus 10 anticipated in a survey compiled by Bloomberg. Other regional manufacturing data already released have also suggested contractionary forces are at play in the sector.