Dow Jones up 100 points as Federal Reserve balances Iran tensions

U.S. stocks were mixed as geopolitical risks temporarily cooled, with the potential for rate cuts counterbalancing tensions with Iran.

Major U.S. stock indices traded mixed amid several key developments. On Friday, June 20, the Dow Jones Industrial Average rose by 103 points, with Apple and financial stocks leading the gains. Meanwhile, the S&P 500 was flat, slipping 0.03%, while the tech-focused Nasdaq fell 0.28%.

Dow Jones Industrial Average heatmap | Source: TipRanks

Traders’ attention was divided between multiple global and domestic events. Markets welcomed a temporary halt in the escalation between the U.S. and Iran. U.S. President Donald Trump stated that he would decide in two weeks whether to enter the Israel-Iran conflict.

While the statement introduced fresh uncertainty, it also opened the door to potential diplomatic engagement. However, Trump has so far remained inflexible on negotiations with Iran, demanding the complete dismantling of the country’s nuclear program.

Fed governor suggests rate cuts in July

On the macroeconomic front, Federal Reserve Governor Christopher Waller suggested the Fed might cut interest rates as early as July. He stated that he does not expect tariffs to significantly increase inflation, potentially allowing for monetary policy easing. However, the decision would require consensus from the full Federal Open Market Committee.

Trump, who appointed Waller during his first term, has continued to pressure the Fed to lower rates. He has repeatedly criticized Fed Chair Jerome Powell, calling him “stupid” and the “worst”. Still, the Fed retains its independence, and Trump ruled out firing Powell.

In trade news, the U.S. has informed semiconductor manufacturers that they will no longer be allowed to use American technology in their Chinese plants. The move is part of an ongoing effort to curb China’s access to advanced semiconductors, which the U.S. considers a key strategic resource.