U.S. stock markets posted strong gains Monday and oil prices fell sharply after Washington and Tehran announced a deal to end their war and reopen the Strait of Hormuz — a critical global shipping lane whose closure had been shaking financial markets and raising fears of widespread inflation.
The Dow Jones Industrial Average climbed to an intraday record following the preliminary peace agreement, while the Nasdaq recorded its largest single-day percentage gain since March 31. Europe’s STOXX 600 index also closed at a record high.
Technology stocks led the charge, with chipmakers posting especially strong gains. Meanwhile, the U.S. dollar fell to a 10-day low against both the euro and the British pound, Treasury yields dropped to a one-month low, and gold prices jumped.
Despite the optimistic market reaction, global shipping companies in Asia and Europe said it could take weeks before they feel confident enough to resume normal transit through the Strait of Hormuz. Carriers are waiting for more details on the deal’s implementation, including the clearing of mines from the waterway. On Monday, only a single liquefied natural gas tanker was observed making the crossing.
In other major developments, Israeli Prime Minister Benjamin Netanyahu appears to be on a collision course with President Donald Trump in the wake of the peace agreement.
G7 leaders began arriving in France on Monday for a summit where they will weigh next steps following the U.S.-Iran deal and seek common ground on the war in Ukraine. The gathering may be overshadowed by new tariff threats from Trump, which have made global leaders increasingly uneasy about U.S. trade policy.
In other news making waves Monday, British Prime Minister Keir Starmer announced a plan to ban social media use for children under 16 years old, while also imposing restrictions on gaming and streaming services. Platforms including YouTube, Facebook, and X would fall under the ban, which has broad support among parents and politicians in the United Kingdom.
On the corporate front, SpaceX announced that its underwriters exercised the so-called “greenshoe” option to purchase additional shares, pushing total proceeds from its initial public offering to $85.7 billion. Fox announced a $22 billion agreement to acquire Roku as it looks to grow its advertising and streaming operations. Chipmaker Nvidia said it plans to raise $20 billion through a U.S. bond sale to fund the massive costs of producing advanced artificial intelligence chips.
International Monetary Fund chief Kristalina Georgieva noted that while there are currently no visible signs of a global economic slowdown tied to the Middle East conflict, risks remain elevated.
Looking ahead, markets will be watching developments in the Middle East, energy prices, G7 outcomes, a widely expected interest rate hike by the Bank of Japan, and a range of U.S. economic data releases including housing starts and import and export prices for May.
