US Stocks Rise on Mideast Ceasefire Optimism, Tech Strength, Despite Housing Slump and Trade Tensions

U.S. stocks displayed resilience on Wednesday, with the S&P 500 climbing 0.2% and edging within 1% of record highs, driven by tech sector strength and optimism over a U.S.-Qatar-mediated ceasefire between Iran and Israel, announced Tuesday. The Nasdaq surged 0.4%, buoyed by tech stocks like Nvidia, which jumped over 3% and neared all-time highs after Loop Capital raised its price target. Meanwhile, the Dow Jones Industrial Average remained nearly flat, hovering within 0.5% of its opening at 43,000, as traders took a breather after a tense week, with the index rejecting the 200-day EMA near 41,800 but showing signs of overbought momentum.

Market sentiment was bolstered by reduced geopolitical risks in the Middle East, with the ceasefire holding after over 13 days of conflict. President Trump declared, “The war in the Middle East is over,” signaling a U.S. meeting with Iran next week. However, stocks trimmed gains after disappointing U.S. housing data, with May’s new home sales dropping 13.7% month-over-month to 623,000 units—far below the expected 7.6% decline to 693,000 units, marking a seven-month low.

Adding to market dynamics, President Trump escalated trade rhetoric, targeting Spain with tariff threats at the NATO 2025 summit in The Hague, claiming Spain would “pay twice as much” as he pushes for trade deals before his 90-day “Liberation Day” tariff suspension expires. Federal Reserve Chair Jerome Powell, concluding his two-day Senate testimony, maintained a balanced stance, with stagflation not seen as the base case, while Fed’s Collins emphasized patience in monetary policy. Despite these pressures, tech stocks continue to dominate risk sentiment, keeping the S&P 500 on track for potential new highs as investors await further economic data or macro developments.