The stock market rallied and oil prices sank after Wall Street saw a chance for de-escalation in the Middle East after Iran’s retaliatory missile attack aimed at a U.S. military base in Qatar.
The Dow Jones Industrial Average rose 375 points, or 0.9%. The S&P 500 gained 1%. The Nasdaq Composite rallied 0.9%.
Brent crude oil futures, the international benchmark, fell 7.2% to $71.48 a barrel, its largest one-day drop since July 5, 2022, according to Dow Jones Market Data. WTI crude oil futures sank 7.2% to $68.51 a barrel, its lowest price since June 12.
Iran’s Revolutionary Guard said in a statement translated into English that it attacked the Al-Udeid base in Qatar “with a devastating and powerful missile attack in Operation Besharat Fatah.”
Qatar’s Ministry of Defense said it successfully intercepted the missile attack targeting the base. It added that there were no deaths or injuries.
President Donald Trump echoed this assessment in a post on Truth Social minutes before the market closed, noting no Americans were harmed and “hardly any damage was done.”
“I want to thank Iran for giving us early notice, which made it possible for no lives to be lost, and nobody to be injured. Perhaps Iran can now proceed to Peace and Harmony in the Region, and I will enthusiastically encourage Israel to do the same. Thank you for your attention to this matter!” Trump concluded.
The attack was in response to the U.S.’s strikes against three nuclear sites in Iran over the weekend. Leading up to the attack, oil prices rose amid fears Trump would get the U.S. involved in Israel’s conflict with Iran. Among the worries were whether Iran would respond by closing the Strait of Hormuz—a move that would send oil prices spiking but also hit Iran’s own economy and harm allies that buy oil from Iran.
“This is about the best case scenario that we could hope for, and I think this is why you’re seeing oil down so much,” Sevens Report Research’s Tom Essaye told Barron’s. “This is a very, very weak response from Iran that is definitely not in any way intended to create another response from the U.S.”
The S&P snapped a three-trading-day losing streak and is now off about 2% from its Feb. 19 record close.
“An ‘All-time high by the 4th of July’ remains live, and the breakout above 6,150 will project measured upside to 7,400,” writes Rich Ross, Evercore ISI’s head of technical analysis. “July is ‘the best month’ for equities over the past 20 years.”
The next test for the market may be Federal Reserve Chair Jerome Powell’s testimony before Congress on Tuesday and Wednesday. Michelle Bowman, the Federal Reserve’s vice chair for supervision, said she would support lowering interest rates as soon as July if the central bank sees inflation pressures remain contained.
Bowman’s speech followed comments on Friday from Fed Gov. Christopher Waller, who also suggested rate cuts as soon as July were on the table. Wall Street will pay close attention to how Powell answers questions about when the central bank can begin cutting rates, given the repeated calls from Trump to do so.
