Wall Street Surges as US-Iran Deal Eases Oil Price and Inflation Concerns

Wall Street rallied sharply on Monday as investors welcomed a preliminary agreement between the United States and Iran aimed at ending the Middle East conflict and reopening the Strait of Hormuz. The breakthrough fueled optimism across financial markets, sending major U.S. stock indexes higher while crude oil prices tumbled on expectations of improved global energy supplies.

The Nasdaq Composite led the gains, soaring 3.07% to 26,683.94, marking its strongest single-day advance since late March. The Dow Jones Industrial Average climbed 468.77 points, or 0.92%, to close at a record high of 51,671.03, while the S&P 500 jumped 1.65% to finish at 7,554.29.

The proposed US-Iran agreement, expected to be formally signed in Switzerland later this week, does not address key geopolitical issues such as Iran’s nuclear program or the Israel-Lebanon conflict. However, investors focused on the potential resumption of oil flows through the Strait of Hormuz, a critical route for global energy shipments.

U.S. crude oil futures settled 4.9% lower, reaching their lowest level since March. The decline in oil prices eased inflation concerns and boosted confidence in growth-oriented sectors, particularly technology stocks. According to Gene Goldman, chief investment officer at Cetera Investment Management, the market was experiencing a classic relief rally driven by lower energy prices and reduced inflation fears.

Technology shares were among the biggest winners, with the S&P 500 technology sector advancing 3.4%. The Philadelphia Semiconductor Index surged more than 5% to a record close, supported by gains in Nvidia, which rose 3.5%, and Micron Technology, which jumped more than 10% after analysts raised their price targets.

Lower fuel costs also lifted transportation-related stocks. United Airlines gained nearly 4%, while cruise operators Norwegian Cruise Line and Carnival Corp posted strong gains. In contrast, the S&P 500 energy sector fell 3.6%, making it the weakest-performing sector of the day.

Investors are now turning their attention to the Federal Reserve’s policy meeting scheduled for Wednesday. Market participants widely expect the central bank to leave interest rates unchanged, although traders continue to price in the possibility of a rate hike later this year. The combination of easing oil prices and moderating inflation pressures could influence future monetary policy decisions.

Meanwhile, market volatility continued to decline, with the CBOE Volatility Index falling for a third consecutive session. Investor sentiment was further boosted by strong momentum in growth stocks and optimism surrounding major upcoming technology IPOs.

Market breadth remained positive, with advancing stocks significantly outnumbering decliners on both the New York Stock Exchange and Nasdaq. The latest rally extended a three-session winning streak for major indexes, helping Wall Street recover from recent pressure caused by geopolitical uncertainty and a temporary slowdown in artificial intelligence-related stocks.