A week ago, markets were bracing for the worst. Oil spiked. Gold surged. Headlines screamed about escalation. But in classic market fashion, things flipped fast.
Now, with Trump pushing hard for a peace deal between Iran and Israel (just as we anticipated in last week’s article), the tone has shifted. The war risk premium is coming out of the market. Oil is pulling back. Safe havens are cooling. And stocks? They’re perking up.
So the big question now: Will peace talks send stocks to fresh all-time highs?
Let’s find out.
From War Fears to Rate-Cut Hopes
Markets hate uncertainty. War headlines are the ultimate uncertainty. That’s why stocks were stuck in choppy ranges last week. But with peace talks gaining traction, a path is opening.
Now the focus is no longer “Will war break out?” It’s shifting to “How soon will Powell cut rates?”
That is key because the sooner those rate cuts arrive, the stronger the stock market could perform.
Why Peace Talks Could Be the Perfect Trigger for Stocks
A credible ceasefire would pull a lot of pressure out of the system:
- Oil prices could stabilize below $70
- Inflation fears could ease
- The Fed could have room to pivot faster
- Corporate confidence could rise
In other words, a peace deal could clear the runway for a broad equity rally. The S&P 500 is already flirting with its recent highs. The Nasdaq remains strong. With the war risk fading, bulls could seize control.
Trump vs Powell: The Next Market Catalyst?
Trump has made it no secret: He wants lower rates. He’s been publicly bashing Powell for being too slow to cut.
Powell, on the other hand, is walking a tightrope. The end of the war makes it somewhat easier for him to move toward rate cuts. But Trump’s new tariffs and lingering inflation risks still complicate the path forward. The market now waits to see when he will finally act.
The sooner the cuts start, the faster this market can run.
Market Setup: Can Stocks Break Out?
Technically, US stocks are primed for a breakout.
The S&P 500 is hovering just below record highs and looks ready for a breakout.
The volatility index (VIX) is falling below 20, which is great news for stocks.
Now add peace headlines and the prospect of a more dovish Powell, and you’ve got the perfect fuel for new highs.
Historically, markets love peace pivots. Whenever geopolitical fears fade, capital rotates back into equities fast.
Sectors to Watch if Peace Talks Hold
If peace talks progress, watch these areas:
What Really Matters for Stocks Now
Let’s zoom out:
- The Fed needs to cut rates soon.
- A peace deal removes a major inflation risk.
- Trump will keep pressuring Powell.
- The market loves two things: falling rates and fading geopolitical tensions.
Put it all together: Stocks could be on the verge of a breakout.
Key Takeaways for Traders After Peace Talks
The shift is happening. The market narrative is no longer “Are we going to war?”
Now it’s: “Will Powell cut soon enough to send stocks to new highs?”
Peace talks are giving bulls momentum. If those rate cuts land this summer, we could see the S&P 500, and maybe even global markets, push to fresh records.
As always, stay adaptable. Follow the headlines. Watch the Fed. And trade what’s happening, not what you think should happen.
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