Stocks closed higher again yesterday. The Nasdaq Composite led the way with a 1.43% gain, followed by the small-cap Russell 2000 Index with 1.43%.

Actually, the Nasdaq 100 gained 1.53%. This index of the largest, non-financial companies on the Nasdaq made a new all-time high close, eclipsing their previous high close on 2/19 from earlier this year.

While the S&P and Nasdaq Composite are the closest of the big three indexes of doing the same (S&P is just 0.85% away, while the Nasdaq is just 1.30% away), they are all higher for the year with the Dow up 1.28%, the S&P up 3.58% and the Nasdaq up 3.12%.

What a difference a couple of months can make. At their worst levels in April, the Dow was down as much as -13.94%, the S&P was down -17.79% and the Nasdaq Composite was down -23.44%. And now they are all back in the plus column.

Continued relief over the de-escalation of the Israel/Iran conflict, which the U.S. briefly got involved in over the weekend after striking Iran's nuclear facilities on Saturday, continues to lift stocks.

Oil, which fell roughly -8% on Monday, following Iran's muted response to Saturday's strike, and the apparent decision to not close the Strait of Hormuz, fell another -6% yesterday as tensions eased.

The easing of tensions have also allowed the markets to focus on the economy and earnings.

As you know, we just came off of another fantastic earnings season with Q1 showing an 11.9% EPS growth rate for the S&P 500.

Q2 earning season is right around the corner. And the forecast is for more growth.

In the meantime, the economy continues to impress. In fact, Fed Chair Jerome Powell after last week's FOMC announcement said that "despite elevated uncertainty, the economy is in a solid position, the unemployment rate remains low, and the labor market is at or near maximum employment."

All bullish comments.

Additionally, the Fed is forecasting full-year GDP at 1.4% for 2025.

And while they see inflation, which is currently at 2.3% y/y (2.6% for core, i.e., ex-food & energy), ticking up modestly to 3% over the rest of the year, but then going back down to 2.4% for 2026, and 2.1% for 2027, they are still calling for 2 rate cuts this year (which shows the Fed does not seem too worried about inflation, in spite of their comments suggesting otherwise).

We'll get another look at inflation on Friday, 6/27, with the Personal Consumption Expenditures (PCE) index (which is the Fed's preferred inflation gauge).

In the meantime, the markets will continue to monitor the events in the Middle East.

And any new trade deal news.

Additionally, as we get closer to July 4^th (next week), we should hear more about the Trump Administration's budget bill, aka, "Big, Beautiful Bill," as the President has asked Congress to pass it by the holiday.

There could be some volatility if it hits a road block. But that's on the docket for this week and next.

In the meantime, stocks are within striking distance of their all-time highs. And a little bit of good news could get them over that threshold, which could begin their next leg up.

See you tomorrow,