U.S. Stocks Rise 39.98% Despite Iran Tensions

U.S. stocks experienced gains despite the escalating tensions between the U.S. and Iran. On Monday, June 23, the Dow Jones Industrial Average rose by 270 points, or 39.98%. The S&P 500 index increased by 0.69%, while the tech-heavy Nasdaq Composite index saw a 0.78% gain, driven by growth stocks. Oil prices, however, dropped by 5% during the same period.

The U.S. had launched strikes on major Iranian nuclear facilities, which occurred while the markets were closed. This timing may have mitigated an immediate market reaction. Oil prices only saw a slight increase, despite concerns that Iran might take drastic measures, such as closing the Strait of Hormuz, a crucial global oil route.

Traders were anticipating Iran's response, and on June 23, the Iranian military reported a strike on a U.S. military base in Qatar. Qatar's foreign ministry confirmed the attack but noted that there were no casualties, as the U.S. had evacuated its planes and personnel days prior.

U.S. officials had previously warned of severe consequences if Iran chose to retaliate. President Donald Trump even suggested the possibility of regime change in Iran, proposing that the Iranian Ayatollahs could be replaced with a democratic government. However, it remains unclear whether the U.S. is fully committed to a war with Iran. The effectiveness of the U.S. strikes, which President Trump described as a "spectacular military success," is still under assessment. Independent agencies reported no signs of elevated radiation following the strikes.

The cautious response from Iran and the questionable effectiveness of the U.S. strikes suggest that tensions may be de-escalating. This sentiment was reflected in the market, with growth stocks seeing gains. Tesla, for instance, saw a nearly 10% increase after launching its Robotaxi service. However, the launch was not without issues, as numerous riders reported speeding and traffic law violations.