The Philippine Stock Exchange index (PSEi) bounced back on Tuesday, rising by a strong 74.47 points, or 1.20 percent, to close at 6,292.75, as it recovered from near two-month lows and marked one of its strongest closes in the past three months.

Investor sentiment improved following the announcement of a tentative ceasefire between Iran and Israel by US President Donald Trump, which helped ease tensions in the Middle East and triggered a global pullback in oil prices.

“The decline in global crude oil prices is a positive development for the Philippine economy,” said Michael Ricafort, chief economist at Rizal Commercial Banking Corporation.

“It could lead to rollbacks in local fuel pump prices and ease inflationary pressures, especially with the peso also strengthening against the dollar.”

In currency markets, the peso opened at 57.20 and closed at 57.16 against the US dollar. The weighted average stood at 56.987, according to data from the Bankers Association of the Philippines. This marked an improvement from the previous trading day’s close of 57.58. A stronger peso and lower oil prices are expected to support the country’s external position and help curb rising import costs.

Optimism up after Fed remarks

Ricafort also noted that dovish remarks from US Federal Reserve officials have buoyed investor optimism, with Fed Fund Futures now pricing in 0.58 rate cuts for the remainder of 2025, slightly higher than the Fed’s projection of 0.50 cuts.

Luis Limlingan, head of Sales at Regina Capital Development Corporation, echoed the improved market sentiment, pointing out that both Philippine equities and Wall Street gained ground despite recent geopolitical tensions.