U.S. stocks rallied on Monday (local time) on hopes that a preliminary U.S.-Iran agreement would restore stability to the energy supply chain, which had been disrupted for months at the Strait of Hormuz.
The S&P 500 rose 1.7%, bringing the benchmark index near an all-time high. The tech-heavy Nasdaq Composite surged 3.1%, buoyed by a 19.6% jump in SpaceX shares after the company staged the largest debut in history last Friday, helping Elon Musk become the world's first trillionaire. The Dow Jones Industrial Average, representing blue-chip stocks, gained 0.9% to close at a record high.
Brent crude, the global benchmark, fell nearly 5% to above $83 a barrel, the lowest since the first week of the conflict.
Asian stock markets were mostly flat on Monday morning, following strong gains the previous day after U.S. President Donald Trump announced the deal with Tehran.
As of 0130 GMT, Japan's Nikkei 225 dipped 0.01%, while South Korea's Kospi, the region's best performer this year, eased 0.06%. In Taiwan (China), the TAIEX edged up 0.2%. Hong Kong's Hang Seng lost 0.07%.
Jay Goldberg, a senior technology equity analyst at Chicago-based Seaport Research Partners, said the announcement of the U.S.-Iran deal tilted investors toward buying. "Simply put, the debate was: AI spending is strong, but there's a war going on. It appears the war is over, so that part of the debate is gone. Investors now feel more comfortable taking on more risk," Goldberg told Al Jazeera.
While the framework agreement between Washington and Tehran has raised hopes for a return to stability in global energy markets, it is expected to take months before energy flows fully normalize due to a large backlog of ships around the Strait of Hormuz and the need to ensure the waterway is clear of Iranian naval mines. According to the International Chamber of Shipping, about 500 vessels are still waiting to transit the strait, which normally carries about one-fifth of the global oil and liquefied natural gas supply.
