Stocks Rally on Geopolitical Calm and US Economic Strength

The stock market saw significant gains today as geopolitical tensions eased and US economic strength improved. The S&P 500 Index, Dow Jones Industrial Average, and Nasdaq 100 Index all rose by over 1% each. September E-mini S&P futures and September E-mini Nasdaq futures also climbed by more than 1%. This uptrend follows the recent easing of tensions in the Middle East, which pushed crude oil prices sharply lower and alleviated concerns about inflation.

The decline in crude oil prices led to a decrease in bond yields, further supporting stocks. The 10-year T-note yield dropped by -5.3 basis points to 4.682%. The slump in oil prices also had an impact on the US dollar, with some analysts predicting it could weaken further.

Other factors contributing to the market's positive performance include a strong July ISM manufacturing index and positive earnings reports from companies such as Meta Platforms and Microsoft. These results have bolstered expectations for Q2 earnings, which are expected to increase by +23% according to forecasts compiled by Bloomberg Intelligence.