FX.co ★ US Stocks Extend Rebound

US equity indices advanced on Tuesday, extending last week’s rebound from four‑month lows and signaling some confidence that the energy shock from the Persian Gulf will not trigger stagflation. The S&P 500 and Nasdaq 100 each gained roughly 0.8%, while the Dow Jones Industrial Average climbed more than 500 points.

Ongoing US and allied strikes in Iran and across the Gulf Cooperation Council (GCC) region reinforced expectations that disruptions to energy exports will persist for now. Even so, equity investors remained constructive on corporate earnings forecasts.

Asset managers rallied as traders reassessed the risk of defaults on large private-sector loans in the software industry. Shares of KKR, Blackstone, BlackRock, and Blue Owl rose between 3% and 5%.

In the technology sector, Nvidia edged higher after projecting $1 trillion in cumulative AI chip revenues by 2027. Qualcomm gained about 3% after announcing a higher dividend and a $20 billion share repurchase program.

The Federal Reserve is widely expected to leave interest rates unchanged at tomorrow’s meeting. However, the Summary of Economic Projections (SEP) is likely to show a broad range of views, reflecting uncertainty over the impact of elevated energy prices on growth and inflation.