Global markets rallied on Monday after the US and Iran reached an agreement to reopen the Strait of Hormuz, easing concerns over energy supply disruptions and fuelling a broad shift toward risk assets, according to a report by Bloomberg.
US equities posted strong gains, with the S&P 500 advancing 1.7% and the Nasdaq 100 climbing 3.1%, while the Dow Jones Industrial Average reached a record high. The move was accompanied by a sharp decline in oil prices, as investors bet that geopolitical tensions in the Middle East may be beginning to ease.
US crude settled below $81 a barrel, helping to temper inflation expectations and reducing concerns that higher energy costs could force tighter monetary policy. Meanwhile, cryptocurrencies also benefited from the improved sentiment, with bitcoin rising above $66,000.
According to US officials, President Donald Trump and Vice President JD Vance signed an electronic memorandum of understanding with Iran aimed at reopening the strategically important Strait of Hormuz. Trump later indicated that shipping access had already been partially restored and would be fully reopened later this week.
Market participants welcomed the development, arguing that a de-escalation in regional tensions could support both economic growth and financial markets. However, some investors cautioned that unresolved issues surrounding Iran’s nuclear programme could still pose risks to the durability of the agreement.
Strategists across Wall Street suggested that easing geopolitical risks may encourage a rotation into cyclical and economically sensitive sectors that have lagged during the recent period of uncertainty. Lower energy prices could also help reduce inflationary pressures and support bond markets.
Attention is now turning to the Federal Reserve’s policy meeting later this week. Economists broadly expect policymakers to leave interest rates unchanged as they assess the economic impact of recent geopolitical events and energy-market volatility. Traders have already reduced expectations for further rate increases following the decline in oil prices.
Among corporate developments, SpaceX extended gains following its public market debut, while Nvidia reportedly attracted strong demand for a planned $25bn bond offering. Elsewhere, Fox agreed to acquire Roku in a deal valued at approximately $22bn including debt, and Salesforce announced the acquisition of AI company Fin for around $3.6bn.
In contrast, shares of Fiserv fell after chief executive Michael Lyons unexpectedly departed to lead Truist Financial.
By the close in New York, the rally had spread across global markets, with the MSCI World Index up 1.5%. Treasury yields were little changed, the dollar was broadly steady, and gold advanced as investors continued to balance improved risk sentiment with lingering geopolitical uncertainty.
