GLOBAL MARKETS: Stocks gain, oil slides as Trump says Iran deal signed

NEW YORK/LONDON – Major stock indexes and government bond prices rallied on Monday, while oil futures fell to a three-month low after U.S. President Donald Trump said a preliminary agreement to end the conflict in the Gulf had already been signed by the United States and Iran.

The Dow Jones Industrial Average closed at a record high, alongside Europe’s STOXX 600, as investors welcomed expectations that the deal could ease global inflationary pressures and reduce the need for further interest rate hikes.

Although full details have not yet been released, the agreement is expected to reopen the blockaded Strait of Hormuz and extend a 60-day ceasefire. This would give negotiators time to address more complex issues, including the future of Iran’s nuclear program.

“The market is responding to the peace deal,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “While it doesn’t fully resolve the core issue—concerns over Iran’s potential nuclear capability—it is encouraging that the Strait of Hormuz may reopen. This news supports the case for a broader summer rally in stocks.”

Investors also said the development could provide relief for central banks meeting this week, as lower energy prices may reduce pressure to tighten monetary policy in response to inflation risks.

Markets had already been pricing in the possibility of a deal, but confirmation still pushed oil prices sharply lower. Brent crude futures fell $4.16, or 4.76%, to settle at $83.17 per barrel, while U.S. West Texas Intermediate dropped $4.13, or 4.87%, to $80.75.

In equities, SpaceX shares surged 19.6% after the Elon Musk-led company completed a high-profile initial public offering with a valuation exceeding $2 trillion. The strong debut eased concerns about volatile market conditions for large listings, setting expectations for upcoming IPOs from companies such as OpenAI and Anthropic.

Airline and travel stocks also advanced, with United Airlines rising 3.8%, while Delta Air Lines, American Airlines, Norwegian Cruise Line, and Carnival Corporation also posted gains.

Technology shares led broader market gains, with semiconductor stocks climbing 5.4%.

The Dow rose 468.77 points, or 0.92%, to 51,671.03. The S&P 500 gained 122.83 points, or 1.65%, to 7,554.29, while the Nasdaq Composite advanced 795.10 points, or 3.07%, to 26,683.94.

Globally, MSCI’s world equity index rose 1.71% to 1,131.28, while Europe’s STOXX 600 edged up 0.19%.

Relief for central banks

Central banks in the United States, United Kingdom, Japan, Australia, Switzerland, Sweden, Norway, and Russia are scheduled to hold policy meetings this week. Japan is widely expected to raise interest rates at its upcoming decision.

The U.S. Federal Reserve is expected to hold rates steady in the 3.50% to 3.75% range at its meeting on Wednesday. Markets will closely watch the statement, updated economic projections, and press conference for any shift in policy direction as officials assess inflation risks.

U.S. Treasury yields moved lower as bond prices rose, reflecting expectations that falling oil prices could ease inflation pressures. The yield on the 10-year Treasury note slipped to 4.471%, its lowest level since May 12.

In Europe, the German two-year yield, which is sensitive to European Central Bank policy expectations, fell 4 basis points to 2.57%, reaching a two-week low.

The U.S. dollar weakened to a 10-day low against the euro and the British pound. The dollar index slipped 0.20% to 99.60. The euro rose 0.25% to $1.1597, after briefly reaching its highest level since June 5.

Sterling edged up 0.1% to $1.342, while the dollar was little changed against the Japanese yen, which remains under pressure despite expectations that the Bank of Japan may raise rates by 25 basis points to 1% on Tuesday.

The Bank of England is expected to keep rates unchanged at 3.75% at its meeting on Thursday and maintain that stance through 2026.

Gold prices extended gains for a third consecutive session, with spot gold rising 2.06% to $4,305.84 per ounce as investors sought safe-haven assets amid shifting global economic expectations.

Oil prices, however, remained well below wartime highs, trading at a roughly $10-per-barrel premium to pre-conflict levels. -Reporting by Caroline Valetkevitch in New York and Marc Jones in London; Additional reporting by Wayne Cole Sydney; Editing by Kim Coghill, Clarence Fernandez, Susan Fenton, Chizu Nomiyama and Cynthia Osterman/Reuters