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US STOCKS-Wall St rallies as rate cut hopes outweigh Middle East turmoil
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US STOCKS-Wall St rallies as rate cut hopes outweigh Middle East turmoil
Jun 23, 2025 11:50 AM

*

Indexes up: Dow 0.72%, S&P 500 0.75%, Nasdaq 0.91%

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Tesla up on robotaxi launch in Texas

*

US business activity moderates; price pressures building

up

(Updates to afternoon)

By Stephen Culp

NEW YORK, June 23 (Reuters) - Wall Street gained ground

on Monday as the prospect of the U.S. Federal Reserve cutting

interest rates as early as July offset fears that Iran would

retaliate against U.S. airstrikes and further escalate the war

in the Middle East.

A broad rally pushed all three major U.S. stock indexes

modestly higher. Consumer discretionary stocks led the

gainers, with a solid boost from Tesla.

"The rally is a bit surprising," said Jay Hatfield, CEO and

portfolio manager at InfraCap in New York. "In a way the U.S.

attack puts an end to the uncertainty of whether the U.S. is

going to attack."

"The market action is extremely bullish because this is the

time frame in June when we're supposed to have a pullback,"

Hatfield added. "People do not want to sell in this market."

Federal Reserve Vice Chair Michelle Bowman said on Monday

that "it is time to consider adjusting the policy rate," as

risks to the job market outweigh inflationary concerns related

to tariffs. Federal Reserve Bank of Chicago president Austan

Goolsbee said that thus far, tariffs have had a more modest

economic impact than expected.

Financial markets are pricing in at least two 25-basis-point

rate cuts before year-end. The first cut is widely expected to

happen in September.

Tesla shares surged after the long-awaited launch

of the company's robotaxi service in Austin, Texas. The electric

vehicle maker's shares were last up 9.4%.

Israel continued to bombard Iran the day after the U.S.

joined the war.

Still,

oil prices tumbled after Iran's retaliation did not

include action to disrupt oil and gas tanker traffic through the

Strait of Hormuz. Tehran had warned it would close the Strait of

Hormuz, a crucial oil shipping route.

On the economics front, S&P Global's advance "flash"

purchasing managers' indexes (PMI) showed the U.S. economy is

expanding at a slightly more robust pace than analysts

anticipated. A separate report showed new home sales, while

under pressure from elevated borrowing costs, posted an

unexpected gain in May.

Later in the week, the Commerce Department's final take on

first-quarter GDP and its Personal Consumption Expenditures

(PCE) and Fed Chair Jerome Powell's congressional testimony are

likely to be parsed for clues regarding the near-term path of

monetary policy.

The Dow Jones Industrial Average rose 305.71 points,

or 0.72%, to 42,512.53, the S&P 500 gained 44.70 points,

or 0.75%, to 6,012.54 and the Nasdaq Composite

gained 177.08 points, or 0.91%, to 19,624.49.

Among the 11 major sectors of the S&P 500, consumer

discretionary stocks led the gainers, while energy was

the only sector in negative territory.

Among other movers, drugmaker Eli Lilly ( LLY ) rose 0.9%

after detailed trial data on rival Novo Nordisk's

experimental obesity drug CagriSema failed to impress investors.

Novo Nordisk's shares dipped 5.3%.

Fiserv's ( FI ) shares rose nearly 3.3% following its

announcement that it would launch a new digital asset platform.

Northern Trust ( NTRS ) jumped 7.2% after a Wall Street

Journal report said Bank of New York Mellon ( BK ) broached the

topic of a potential merger.

AI-server-maker Super Micro Computer ( SMCI ) dropped 6.8%

after it announced a private offering of $2 billion five-year

convertible bonds.

Quarterly results from sportswear company Nike ( NKE ) and

package delivery firm FedEx ( FDX ) are expected later in the

week.

Advancing issues outnumbered decliners by a 1.67-to-1 ratio

on the NYSE. There were 100 new highs and 66 new lows on the

NYSE.

On the Nasdaq, 2,389 stocks rose and 2,026 fell as advancing

issues outnumbered decliners by a 1.18-to-1 ratio.

The S&P 500 posted 12 new 52-week highs and 4 new lows while the

Nasdaq Composite recorded 77 new highs and 105 new lows.

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