US stocks rallied on Thursday, June 18, 2026, as investors responded to a new interim peace deal between the US and Iran, which reopened the Strait of Hormuz. While the Nasdaq Composite surged nearly 2%, markets also digested a hawkish Federal Reserve interest rate outlook and a potential chipmaking partnership between Apple and Intel.
Market Reaction to Middle East Peace and Fed Policy
Wall Street finished a holiday-shortened week on an upbeat note, with the Nasdaq Composite (^IXIC) climbing 1.9% and the S&P 500 (^GSPC) gaining 1.1% on Thursday, according to Kiplinger. The Dow Jones Industrial Average (^DJI) saw a more modest increase of 0.3%, closing at 51,565, which marked a new all-time weekly closing high.
The optimism stems primarily from the signing of an interim peace memo between President Donald Trump and his Iranian counterpart, a development that led to the immediate reopening of the Strait of Hormuz to commercial traffic. As Yahoo Finance reports, the US naval blockade in the region was removed as part of the agreement, with further negotiations on Tehran’s nuclear program expected to span the next 60 days. The Strait of Hormuz is widely recognized as one of the world’s most critical maritime chokepoints, with a significant percentage of global daily oil consumption passing through the narrow waterway. The reopening is viewed by market analysts as a vital step in stabilizing global energy supply chains.
This cooling of geopolitical tensions has eased energy market concerns. Brent crude futures, which had spiked during the recent conflict, hovered at approximately $79 a barrel on Thursday, while West Texas Intermediate (CL=F) traded above $75. The stabilization of crude prices is historically linked to broader market relief, as energy costs remain a primary input for both industrial production and consumer inflation metrics.
Fed Signaling and the Path for Interest Rates
Despite the market’s relief regarding the Middle East, investors are balancing these geopolitical gains against a more restrictive monetary outlook. The Federal Reserve held the federal funds rate steady at 3.50% to 3.75% this week, but accompanying commentary signaled that further tightening remains a distinct possibility.
“The commentary Warsh gave made it clear that, currently, unless inflation falls much closer to the 2% target, which he made clear would not be changed, a rate hike was likely by year’s end,” Louis Navellier of Navellier & Associates said, via Kiplinger.
Navellier noted that the tone during the press conference held by Federal Reserve Chair Kevin Warsh “was perceived as more hawkish than hoped for.” The central bank concluded its meeting with a firm commitment to its mandate, stating, “The Committee will deliver price stability.” The Federal Reserve’s dual mandate—to promote maximum employment and stable prices—often forces the Committee to make difficult decisions when economic growth and inflation data diverge. By maintaining a hawkish stance, the Fed is signaling to the market that it prioritizes long-term inflation control over short-term market stimulation.
Apple and Intel Chipmaking Partnership
Tech stocks received an additional boost following a social media post from President Donald Trump regarding a collaboration between Apple and Intel. Trump claimed on Truth Social that “Apple has agreed to work with Intel to design and build its Chips in America.”
The president framed the potential deal as a strategic effort to reclaim domestic manufacturing capabilities, stating, “The Technology the World relies on was invented in America.” Trump further criticized predecessors for allowing “Taiwan and others [to] steal our Semiconductor Factories” and failing to utilize tariffs to protect domestic industry. The semiconductor industry has been a focal point of recent federal policy, with bipartisan interest in the CHIPS and Science Act, which aimed to incentivize domestic manufacturing to mitigate supply chain vulnerabilities.
While neither company has issued a formal confirmation of the president’s specific post, Yahoo Finance and Kiplinger both highlighted the market’s positive response to the news. Intel shares saw a significant jump of 10.6% on Thursday, while Apple shares rose 0.7%. Market participants often react to such high-level announcements as indicators of future government support or regulatory shifts that could favor domestic tech production.
Weekly Performance Summary
The market’s performance this week reflects a transition from war-time volatility to a focus on corporate partnerships and central bank policy. The following table summarizes the weekly gains for the major indices:
| Index | Weekly Performance |
|---|---|
| Dow Jones Industrial Average | +0.7% |
| S&P 500 | +0.9% |
| Nasdaq Composite | +2.4% |
As trading concludes for the week, investors remain focused on the 60-day window for the US-Iran diplomatic talks and the potential for a Federal Reserve rate hike by the end of 2026. US markets will remain closed on Friday in observance of the Juneteenth holiday. Historically, short-week trading sessions can lead to increased volatility as institutional investors adjust portfolios ahead of the extended break.
Find more reporting in our News section.
