U.S. stocks rose on Monday, with the Dow Jones Industrial Average rising 516 points, or 1%, as investors responded favorably. president donald trumpAnnounced that a deal had been reached to end the conflict between the United States and Iran. The benchmark index also hit a new intraday high, reflecting growing optimism among market participants for peaceful development.
Broader markets also posted strong gains, with the S&P 500 up 1.5% and the Nasdaq up 2.3%. Investor sentiment was boosted by expectations that easing tensions in the Middle East could reduce the risk of global oil supply disruptions and reduce uncertainty in the world economy.
SpaceX shares rise
SpaceX’s stock price, which was already up 19% in its public market debut on Friday, surged more than 6% on Monday. Brian Mulberry, chief market strategist at Zacks Investment Management, told CNBC that the stock market reaction was more orderly than expected, with investors appearing to be buying and holding stocks rather than trading quickly.
US-Iraq Peace Agreement
Trump said on social media Sunday night that the deal with Iran is “now complete.” Pakistani Prime Minister Shehbaz Sharif said a memorandum of understanding supporting the deal was expected to be signed in Switzerland on Friday. It comes amid concerns that the deal could be delayed or derailed as renewed hostilities between Israel and Iran-backed Lebanese Hezbollah have heightened regional tensions.
Oil prices fall
Trump also announced that he had authorized the reopening of the Strait of Hormuz, one of the world’s most important oil shipping routes. News of the reopening sent oil prices sharply lower as traders expected oil supplies to flow more freely again. U.S. Vice President Vance said he expects the Strait of Hormuz to remain open and free of charge for a long time.
Also read: Crude prices drop 4.7% after US-Iran deal ends war and reopens Hormuz: Here’s what the experts say
U.S. crude oil prices fell about 5% to around $80 a barrel. Mulberry said lower crude oil prices could reduce inflationary pressures and reduce the likelihood of a recession. Fed Interest rates need to be raised. He added that while crude oil prices have fallen, prices for petroleum products such as jet fuel may take longer to fall, CNBC reported.
According to CME’s FedWatch tool, futures markets show a greater than 98% chance that interest rates will remain unchanged through the end of the year.
Airline and cruise stocks rise
Companies benefiting from lower fuel prices saw strong gains following the reopening of the Strait of Hormuz. United Airlines shares rose about 3%. shares Delta Air Lines Up about 1.5%. Shares of cruise operator Royal Caribbean Group rose more than 4%. Carnival Corp. shares rose more than 3%.
Investors expect lower oil prices to lower fuel costs for airlines and cruise lines, improving their profit prospects.
Earlier in the day, stocks opened higher
The Dow was up 607 points, or 1.2%, shortly after trading began at 9:30 a.m. ET. Meanwhile, the S&P 500 and Nasdaq were up 1.3% and 2.2%, respectively, in early trade.
Overall, Wall Street focused more on a U.S.-Iran peace deal, lower oil prices and hopes for stable interest rates, helping push the Dow Jones and other major stock indexes higher.
