IXIC: Nasdaq Composite Books 1.5% Gain as Middle East Cooldown Sweeps Up Battered Tech Picks

Good news for the Mag 7 crews: all members of the exclusive club logged increases on Monday. But can the rally last into the week?

💸 Nasdaq Pops on War Cooldown

• The Nasdaq Composite index IXIC powered higher by 1.5% on Monday as traders reassessed the situation between Iran and Israel and figured it’s time to plow some capital into battered tech deals.
• All members of the elite Magnificent Seven club finished the session in the green with Meta META leading the way, up nearly 3%. The social-media giant was followed by ecommerce and computing heavyweight Amazon AMZN, up 2%.
• The other two equity benchmarks also posted solid gains, but not that solid. The S&P 500 index wrapped up regular trading with an advance of 1% and the 30-stock Dow Jones climbed 0.8%, or 317 points.

📢 Iran Signals Peace Intentions

• Behind the rise was a notable cooldown in the war tensions between Iran and Israel. The Islamic Republic signaled intentions to deescalate hostilities and get back to the negotiation table for talks over its nuclear program.
• That is, under one condition — Tehran said it wants the US to stay out of it. In other words, Trump should pull back US forces and weaponry. “They’d like to talk, but they should have done that before,” Trump told reporters Monday.
• Gulf countries also stepped in with pleas for peace. Saudi Arabia, Qatar, and Oman are lobbying the US to corner Israel and stop the fighting. So far, there’s no clear indication that Netanyahu is ready to back down.

👀 Looking Ahead to Fed Event

• Against that backdrop, futures contracts on the main averages were slipping under the flat line Tuesday morning. Besides war jitters, there’s a flurry of economic data coming to test the resilience of equities and global markets in general.
• The Federal Reserve is bringing the squad over for a decision today and tomorrow and will wrap up with a presser by none other than the man of the hour — Jay Powell. The Fed boss is expected to say that the US central bank is so far happy with the progress made on inflation, but won’t cut interest rates just yet.
• A rate cut, Powell has said before, will come when there’s been a consistent stream of good data that suggests the economy is doing well, employment is holding up, and inflation is getting closer to the Fed’s 2% target (which it isn’t).