Don’t Worry, Be Happy: Nasdaq 100 Shoots to Record High After Ceasefire Declared in Middle East

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The Nasdaq 100 closed at a record high Tuesday as investors welcomed easing tensions in the Middle East and signals from the Federal Reserve that interest rate cuts remain possible. After more than a week of market jitters driven by fears of broader conflict between Israel and Iran, the ceasefire brokered by President Trump provided enough relief to trigger a rally, especially in tech-heavy sectors.

The Nasdaq 100 ended the day at 22,190.52, rising 1.5% and marking its first record close since February. The index has gained nearly 3% so far this week as traders embrace risk-on trades amid hopes that Middle East tensions will remain contained.

Top Gainers Propel Nasdaq 100 to Record Territory

Several high-profile tech names helped drive the Nasdaq 100 higher. Chipmakers and AI-focused firms saw outsized gains, benefiting from both easing geopolitical fears and expectations that lower interest rates could arrive sooner than previously projected.

Tesla jumped over 4% as investors bet on continued demand for electric vehicles and the company’s leadership in AI-driven autonomous technology. The rally in Tesla shares added significant momentum to the broader tech sector, which has shown resilience throughout recent market turbulence.

Semiconductor companies also surged. Nvidia and AMD posted solid gains as traders viewed the easing of Middle East risks as a green light for capital to rotate back into high-growth, high-valuation tech stocks. The AI boom in particular continues to dominate investor enthusiasm, reinforcing demand for chips and data infrastructure.

Additionally, software giants including Microsoft and Alphabet contributed to the record run as they benefited from improved risk appetite and AI optimism. Meanwhile, Amazon and Meta rose on the back of expectations that consumer activity will remain steady despite ongoing tariff concerns.

Middle East Ceasefire and Fed Signals Lift Market Sentiment

Markets reacted swiftly to news of the ceasefire between Israel and Iran, even as Trump warned of possible violations. The agreement alleviated immediate concerns over energy market disruptions, sending oil prices sharply lower. Brent crude dropped as much as 7% intraday, while West Texas Intermediate fell to $64 per barrel before recovering slightly.

The tech sector’s outsized gains were further supported by Fed Chair Jerome Powell’s comments to Congress. Powell stated the central bank is prepared to cut rates if inflation remains contained, fueling optimism that monetary policy will ease by late summer or early fall.

“Markets are finally breathing again,” said Haris Khurshid, chief investment officer at Karobaar Capital. “The easing in Middle East tensions, paired with Powell striking a more flexible tone, is giving equities room to run.”

Cautious Optimism Prevails Despite Ceasefire

While traders cheered the Nasdaq 100 rally, many remained cautious about the longer-term outlook. Analysts at Oxford Economics noted that any breakdown in the ceasefire or renewed aggression could quickly reignite risk aversion.

Other market strategists, including Barclays’ Emmanuel Cau, warned that valuations remain stretched. “The stock market is still very expensive at a time where growth in the U.S. economy is slowing and earnings estimates are falling,” Cau noted.

Still, for now, investors appear willing to embrace the rally, focusing on the AI-driven momentum in tech stocks and the prospect of lower interest rates later this year.

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