Wall Street hits record as US-Iran framework deal sends oil tumbling and lifts tech stocks
Wall Street rallied on Monday after the US and Iran reached a framework agreement to end their conflict, with the reopening of the Strait of Hormuz sending oil prices sharply lower and easing inflation fears.
A deal that moved markets
Futures pointed to sharp gains ahead of the open, and the three major US indices delivered. The Dow Jones Industrial Average advanced 0.9% to a record 51,671 points. The technology-heavy Nasdaq jumped 3.1% to 26,684, while the broad S&P 500 added 1.7% to close at 7,554. The VIX volatility index fell for a third consecutive session. Earlier, Asian and European bourses joined the wave: Japan’s Nikkei surged 5%, South Korea’s Kospi climbed 5.2%, Germany’s Dax rose to around 25,060, and the Stoxx 600 added 0.6%.
The markets are experiencing a classic relief rally. We have a deal between the US and Iran that pushes oil prices sharply lower. That alleviates inflation fears and lures investors back into riskier assets like technology.
Oil sinks on Strait of Hormuz reopening
US crude dropped 4.9% to its lowest level since March, while Brent for August delivery slid nearly 5% to $83.11 a barrel. At the height of the conflict, prices had touched around $120. The breakthrough came after US President Donald Trump confirmed a preliminary understanding, with a formal signing set for Friday in Switzerland. The document was signed by Trump, Vice President J.D. Vance and Iranian parliament speaker Mohammad Bagher Ghalibaf, according to a senior US official. The deal’s core promise is the full reopening of the Strait of Hormuz, a chokepoint through which a large share of the world’s oil passes.
- Framework agreement announced; oil falls sharply, global stocks rally
- First Fed meeting under chair Kevin Warsh, rates expected to hold
- Formal signing of peace agreement in Switzerland
Tech and travel stocks ride tailwinds
Lower fuel costs and ebbing inflation bets lifted interest-rate-sensitive tech shares. Airlines and cruise operators also benefited: United Airlines, Norwegian Cruise and Carnival rose. The star performer, however, was SpaceX, the freshly listed company that had already soared 19% on its debut Friday. Monday brought another 6% gain, pushing the stock to about $170. The enthusiasm around the stock is seen as a test for upcoming IPOs from OpenAI and Anthropic later this year.
The Fed enters a new chapter
Investors now look to Wednesday, when the Federal Reserve holds its first policy meeting under the new chair, Kevin Warsh, who succeeded Jerome Powell in May. The CME FedWatch tool pegs the probability of rates staying unchanged in the 3.5–3.75% range at nearly certain. Hopes for a cut have faded; instead, the market now assigns only about a 25% chance of a hike in September, down about 10 percentage points from earlier. The drop in oil has eased immediate inflation worries, but May CPI came in at 4.2%, the highest since April 2023, leaving the Fed caught between a cooling labour market and sticky consumer prices. Ten-year Treasury yields slipped four basis points to 4.45%.
Fragile peace on the ground
Not all risks have vanished. The framework agreement excludes Iran’s nuclear programme and the Israel-Lebanon conflict, and Israel continued strikes on Lebanese territory even as the deal was being celebrated. Iran considers a ceasefire between Israel and Hezbollah an integral part of the broader peace, while Hezbollah announced it had not attacked Israel since the deal was made public. A weak Empire State index reading of 5.7 provided a sobering macro counterpoint to the rally.
