In an age when the global economy is tethered to the tremors of conflict and the whims of power, a fragile ceasefire between Israel and Iran has briefly steadied the nerves of Wall Street. U.S. stock futures climbed Tuesday morning, lifted by President Trump’s surprise announcement of a truce after nearly two weeks of escalating violence. It was a moment of relief, albeit tenuous, for markets rattled by missile strikes and oil price shocks.

The ceasefire - coming just days after the U.S. bombed Iranian nuclear sites and Iran struck back at an American base - seemed almost cinematic in its suddenness. 

Investors, conditioned to tune out moral complexity in favor of short-term clarity, responded in kind: energy stocks fell as oil eased, defense stocks dipped, and tech surged. Tesla and Alphabet led the charge.

Yet beneath the rally lies unease. With the Fed preparing remarks, and the economy’s vital signs under scrutiny, markets remain captive to geopolitics - and the illusion that diplomacy, like risk, can be priced in.

But let's take a quick look back. In New York, the day had started badly: prices rose at the open, turned red mid-session, and then suddenly reversed course - just as oil prices plummeted like a cryptocurrency after an interview with Elizabeth Warren. Wall Street even ended the day at its highest point, with the S&P 500 index gaining nearly 1%. You weren't dreaming this morning if you looked at the price of Brent crude: the price per barrel fell nearly $10 from the previous day, returning to around $70. This move was triggered shortly after Iran fired a salvo of missiles at the main US military base in Qatar. At first glance, this retaliation for the US bombing of Iranian nuclear sites looked like an escalation. But in reality, it was quickly classified as a “symbolic response.”

In short, Tehran responded for the sake of form, but things did not go very far. Qatar's response reinforced this symbolism. Doha intercepted the missiles fired by Iran, which had sent a warning of its attack to limit casualties, before condemning the firing and threatening to respond in accordance with international law. This was a way of defusing the escalation. The two countries have common interests (they jointly exploit the world's largest gas field) and Qatar has been the mediator and meeting point for negotiators in the Middle East for several months now. Brent’s price drop, despite Iran’s attack on Qatar, reflects market confidence that no major escalation will disrupt oil supplies.

But it's not over yet.

Donald Trump made his grand return to his favorite role: the man who ends the fight he himself started, announcing a ceasefire between Israel and Iran. But optimism was short-lived. Hours later, Israel claimed the agreement was broken and responded with new strikes. Iran, unsurprisingly, denied the breach. The cycle resumes.

In other news, yesterday, two members of the US central bank uttered the magic words “rate cut.” Michelle Bowman, vice chair of the Fed, believes that an adjustment (downward, of course) in rates is now possible. For her, the risks to employment now outweigh inflation fears linked to tariffs. For his part, Austan Goolsbee, head of the Chicago Fed, conceded that the economic impact of tariffs is less severe than expected, which could lead to monetary easing. However, Bowman and Goolsbee are considered doves within the US central bank, i.e. Fed members who are most likely to advocate rate cuts. Their statements have shifted the balance slightly in favor of monetary easing at the July meeting, although this scenario remains very much in the minority (the market gives a 77% chance of the status quo, compared with 83% before Bowman and Goolsbee's comments).

In Asia-Pacific, the announcement of a ceasefire pushed India and Australia up 0.9%, Tokyo 1.1%, Hong Kong and Taiwan 2.1% and Seoul 3%. European indices and US futures are well into positive territory, with sharp gains expected at the open.

Today's economic highlights:

On today's agenda: the Ifo Business Climate Index, Current Assessment, and Expectations in Germany; in the United States, the FHFA House Price Index, Conference Board Consumer Confidence, and the Richmond Fed Manufacturing Index. See the full calendar here.

  • Dollar index: 97,600
  • Gold: $3,311
  • Crude Oil (BRENT): $68.76 (WTI) $65.87
  • United States 10 years: 4.33%
  • BITCOIN: $105,280

In corporate news:

  • Amazon plans to invest $54 billion in Britain over the next three years and is enhancing its premium beauty sector.
  • Tesla faces legal challenges over a fatal crash and scrutiny from NHTSA, while launching its robotaxi service in Austin, Texas.
  • Amgen is expanding development plans for its MariTide weight-loss drug.
  • Omnicom and Interpublic merger approved by US FTC under a consent order.
  • Compass Pathways' experimental depression drug shows promising results in a late-stage trial.
  • Starbucks denies plans for a full sale of its China operations.
  • Northern Trust says it wants to remain independent after the WSJ published an article about a possible merger with Bank of New York Mellon.
  • Novo Nordisk ends its collaboration with Hims & Hers Health on Wegovy.
  • Compass sues Zillow for allegedly hindering competition in the real estate advertising market.

Analyst Recommendations:

  • Akamai Technologies, Inc.: Zacks downgrades to underperform from neutral with a price target reduced from USD 87 to USD 66.
  • Electronic Arts Inc.: Roth Capital Partners upgrades to buy from neutral with a price target raised from USD 175 to USD 185.
  • Essex Property Trust, Inc.: Raymond James upgrades to outperform from market perform with a target price of USD 315.
  • Microsoft Corporation: Baptista Research downgrades to hold from outperform with a target price of USD 525.
  • Mid-America Apartment Community, Inc.: Raymond James downgrades to market perform from outperform.
  • Akamai Technologies, Inc.: Zacks downgrades to underperform from neutral with a price target reduced from USD 87 to USD 66.
  • Ge Vernova Inc.: Morgan Stanley maintains its overweight recommendation and raises the target price from USD 422 to USD 511.
  • Nike, Inc.: Evercore ISI maintains its outperform recommendation and reduces the target price from USD 97 to USD 75.
  • O'reilly Automotive, Inc: Wells Fargo maintains its overweight recommendation and reduces the target price from USD 1550 to USD 103.
  • Strategy Incorporated: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 407 to USD 522.