Global Stocks Near Highs, Oil Rebounds on Ceasefire Hopes

The global equity markets maintained their position near historical peaks during Wednesday because of decreasing geopolitical tensions and rising expectations about U.S. interest rate reductions. The oil market experienced a price increase which ended its three-day losing trend.

The Middle East peace agreement between Israel and Iran remained stable thus minimizing the risk of wider regional conflicts that could affect worldwide energy supply. President Donald Trump expressed his approval of the truce at the NATO summit while indicating better relations with Tehran.

The S&P 500 and Nasdaq reached near their highest points because of technology and communication stock performance although the Dow Jones Industrial Average declined slightly. European stock prices declined by 0.5% while Asian markets showed overall positive results.

During his two-day congressional testimony Federal Reserve Chair Jerome Powell maintained the focus of investors. Markets analyze his statements to determine if the Federal Reserve will start reducing interest rates during the current year.

The price of U.S. crude oil increased by 1% to reach $65.04 per barrel and Brent oil prices increased nearly 1% to $67.80. The market experienced a significant price drop during the week before oil prices started to rise after the U.S. military attacked Iranian nuclear sites.

Sandy Villere of Villere & Co observed that the market showed strength despite receiving conflicting market signals. The market expects rate cuts to occur when oil prices remain stable and inflation remains under control.