U.S. Stocks Climb on Hopes of Geopolitical De-escalation Ahead of Fed Decision

The S&P 500 rose by approximately 0.5%, while the Dow Jones Industrial Average gained about 0.7%, and the tech-heavy Nasdaq Composite increased by roughly 0.5%.

The uptick followed remarks by U.S. President Donald Trump suggesting Iran’s willingness to negotiate, boosting hopes for de-escalation in the Israel-Iran conflict.

U.S. equity markets also received support from economic data, with weekly unemployment claims aligning with expectations. Additional backing came from a decline in U.S. Treasury yields, driven by weaker housing data for May, including new home construction and building permits. Yields on 10-year U.S. Treasuries dropped by about two basis points to 4.36%.

Trading volumes remained below average as investors awaited the Federal Open Market Committee (FOMC) decision, set to conclude on Wednesday. Markets expect the Federal Reserve to maintain current interest rates, with attention likely focused on the Fed’s official interest rate projections (Dot Plot) and its economic forecasts for growth, inflation, and unemployment.

Investors are also closely monitoring remarks from Federal Reserve Chair Jerome Powell for any signals during his press conference following the central bank’s decision announcement.