TLDR
- The Nasdaq jumped nearly 3%, the S&P 500 rose 1.8%, and the Dow climbed 1.3% after a US-Iran ceasefire was announced
- The deal aims to reopen the Strait of Hormuz, through which roughly a fifth of the world’s oil flows
- Brent crude fell nearly 5% to around $83 a barrel on easing supply fears
- SpaceX shares rose over 8% Monday after a record public debut Friday, pushing its market cap above $2 trillion
- The Federal Reserve meets Wednesday, with traders pricing in a 98% chance rates stay unchanged
US stocks posted strong gains on Monday after the United States and Iran confirmed a preliminary peace deal to end their conflict and reopen key oil shipping lanes in the Middle East.
The Nasdaq Composite led the way, surging close to 3%. The S&P 500 gained 1.8% and the Dow Jones Industrial Average rose 1.3%.
President Trump announced the ceasefire late Sunday in a post on Truth Social, calling the agreement “complete.” A formal signing is expected in Switzerland on Friday.
The deal follows more than three months of conflict between the US and Iran, which had rattled global markets and raised fears about oil supply disruptions.
Strait of Hormuz Set to Reopen
The Strait of Hormuz, a key waterway off Iran’s southern coast, could reopen to oil tankers as early as this week. Trump said the delay was due to mine-clearing operations.
About a fifth of the world’s oil passed through the strait before the conflict began in late February. A full return to normal shipping flows is still expected to take months.
Oil prices dropped sharply on the news. Brent crude fell nearly 5% to around $83 a barrel. West Texas Intermediate also fell over 5% but held above $80.
Pakistani Prime Minister Shehbaz Sharif confirmed the deal, saying both nations had declared “the immediate and permanent termination of military operations on all fronts,” including Lebanon.
Iran has said the deal will not take effect until it is signed. Neither side has released full details of the agreement terms, leaving some shipowners cautious.
Gold prices rose and the US dollar weakened following the announcement. US government bond yields fell, adding further support to equities.
Fed Decision in Focus
Investors now turn their attention to the Federal Reserve’s two-day policy meeting, which concludes Wednesday.
Traders are pricing in a greater than 98% probability that the Fed holds rates steady, according to CME FedWatch data. However, some analysts believe the Fed may move to remove its easing bias from its statement.
New Fed Chair Kevin Warsh faces pressure from both rising inflation data and calls from President Trump for aggressive rate cuts.
SpaceX continued to draw attention on Wall Street. Shares rose more than 8% Monday after the company’s public debut on Friday, where the stock jumped over 19% and pushed its market value above $2 trillion.
Fox shares fell 15% after announcing a $22 billion deal to acquire Roku. Roku stock edged down 1% on Monday after gaining 20% on Friday.
The NYSE and Nasdaq will be closed Friday in observance of Juneteenth.
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