Airlines, cruise operators and technology stocks led gains
Wall Street rallied sharply on Monday, after president Donald Trump announced a peace agreement with Iran that included the reopening of the Strait of Hormuz, sending oil prices tumbling and lifting equities to historic highs.
The Dow Jones Industrial Average added 468.77 points, or 0.92%, to close at a record 51,671.03. The index also reached a new all-time intraday high during the session. The S&P 500 climbed 1.65% to 7,554.29, while the Nasdaq Composite gained 3.07% to finish at 26,683.94, marking its best single-day performance since March 31.
Stocks rose at the start of the holiday-shortened trading week after Trump announced that an agreement had been reached to end the war between the US and Iran.
“The Deal with the Islamic Republic of Iran is now complete,” Trump wrote on social media. “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade,” he added. “Ships of the World, start your engines. Let the oil flow!”
A senior administration official told CNBC’s Megan Cassella that the memorandum of understanding was signed electronically on Sunday, with a formal signing ceremony expected on Friday. The two countries agreed on a framework for future negotiations, and Iran will not receive any economic benefits from the deal until it takes action on its nuclear program.
Vice president JD Vance told CNBC that the strait is expected to remain open on a toll-free basis over the long term.
“Our expectation is that the strait is going to be opened in a toll-free way for the long term, and that’s the sort of thing that we’re going to figure out in these technical negotiations,” Vance said.
Oil falls, airlines and cruise operators gain
US crude oil futures fell 4.8% to $80.80 per barrel, while Brent crude, the international benchmark, declined 3.9% to $83.89 per barrel.
Shares of United Airlines jumped 3%, while Delta Air Lines gained 1.5%. Shares of Royal Caribbean Group and Carnival Corp. rose more than 4% and 3%, respectively.
Brian Mulberry, chief market strategist at Zacks Investment Management, said the development carried broader implications for monetary policy.
“It seems real this time as both rates and oil have broken through key levels,” Mulberry said, adding that the development “should alleviate pressure on the FOMC commentary, and that is good news long term for this market.”
SpaceX extends debut rally
SpaceX shares gained nearly 20%, extending a 19% surge from their public market debut on Friday.
Mulberry described the trading as orderly.
“It seems to be much more orderly than what I expected, and that’s not a bad thing,” he said. “This is not some type of a meme stock right out of the gate, that it actually is people adding it and holding it in their portfolio, not trying to turn it over.”
Global markets follow Wall Street higher
Japan’s Nikkei 225 surged to a record intraday high before ending the session up 5% at 69,317.50, while South Korea’s Kospi jumped 5.2% to 8,545.98. Hong Kong’s Hang Seng Index was up 0.56% in its final hour of trading, while mainland China’s CSI 300 rose 2.39% to 4,891.71. Australia’s benchmark S&P/ASX 200 rose 1.25% to 8,914, and India’s Nifty 50 was last up 1.25%.
The pan-European Stoxx 600 opened 1.2% higher, with France’s CAC 40 leading early gains at 1.9% and Germany’s DAX up 1.8%. The index ultimately closed up 0.25%, as energy stocks weighed on the UK’s FTSE 100, which finished down 0.4%. European carmakers and travel stocks were among the session’s standout performers, with the autos sector adding 2.8% and construction gaining 1.8%, while oil and gas stocks shed 3%.
