Markets Upbeat as Trump Announces Middle East Ceasefire

On Tuesday, U.S. stock index futures saw gains following President Donald Trump's announcement of a ceasefire between Israel and Iran. This development placated investor concerns that had been mounting during the 12-day conflict, which had adversely affected global risk assets and heightened inflation fears.

As investors look forward to Federal Reserve Chair Jerome Powell's congressional testimony later today for guidance on upcoming interest rate changes, inflation expectations remain high for the coming months. The announcement of the ceasefire caused oil prices to drop to a two-week low, as fears revolving around supply disruptions from the Middle East diminished.

Although the ceasefire was initially promising, tensions resurfaced when Israeli Defence Minister Israel Katz reported that Iran breached the agreement by firing missiles. President Trump subsequently accused both nations of violating the ceasefire terms. Despite this, market optimism persists, with major indices showing significant gains, reflecting investors' belief that a broader regional conflict or major market disruption is unlikely.

(With inputs from agencies.)