Markets Surge as US-Iran Peace Deal Boosts Risk Sentiment and Sends Oil Tumbling

Major US equity indexes closed significantly higher on Monday, driven by optimism surrounding a diplomatic breakthrough between the US and Iran. The S&P 500 Index ($SPX) rose +1.65%, the Nasdaq 100 Index ($IUXX) surged +3.06%, and the Dow Jones Industrial Average ($DOWI) reached a new all-time record, closing up +0.92%. June E-mini S&P futures (ESM26) and Nasdaq futures (NQM26) followed suit, gaining +1.68% and +3.06%, respectively.

The risk-on sentiment was triggered by an agreement between the US and Iran to end hostilities and reopen the Strait of Hormuz. President Trump confirmed that the waterway will reopen following the signing of a peace deal in Switzerland on Friday. This agreement initiates a 60-day window for negotiations regarding Iran’s nuclear program, though the US has cautioned that military action could resume if a nuclear agreement is not reached.

Technology stocks spearheaded the rally, while airline shares climbed as falling crude oil prices reduced expected fuel costs. Metals and mining stocks also rose, as the dip in oil prices is viewed as a dovish signal for global central banks.

Conversely, energy producers faced headwinds due to the decline in crude prices. Additionally, several US economic reports released Monday were weaker than anticipated, putting downward pressure on equities. The June Empire manufacturing survey fell to 5.7 (vs. 13.7 expected), May manufacturing production remained flat (vs. +0.3% expected), and the June NAHB housing market index unexpectedly dropped to 35 (vs. 37 expected).

WTI crude oil prices (CLN26) plummeted more than 4% to a three-month low following the news of the peace deal. This sharp decline eased inflation expectations and pushed global bond yields lower; the 10-year T-note yield hit a one-month low of 4.42%. Current market pricing suggests a modest 4% probability of a 25 basis point rate hike at the upcoming FOMC meeting on June 16-17.

International markets mirrored the gains. The Euro Stoxx 50 hit a new record high, closing up +0.68%, while China’s Shanghai Composite rose +1.61%. Japan’s Nikkei-225 surged +4.99% to reach a new all-time high.

Interest Rates

September 10-year T-notes (ZNU6) closed up +4.5 ticks, with the yield falling 1.6 bp to 4.463%. The rally in T-notes was supported by the drop in WTI crude and weak economic data, although the strong equity rally limited gains by reducing safe-haven demand. In Europe, the 10-year German bund yield finished down -4.1 bp at 2.954%, and the 10-year UK gilt yield closed down -2.4 bp at 4.812%.

In the Eurozone, April industrial production grew +0.1% m/m, meeting expectations. ECB Governing Council member Martins Kazaks noted that while inflation forecasts have been raised and risks remain skewed to the upside, the ECB is prepared to act to prevent energy price increases from permeating the broader economy. Swaps currently imply an 18% chance of a +25 bp ECB rate hike on July 23.

US Stock Movers

The semiconductor and AI sectors provided strong support for the broader market. The iShares Semiconductor ETF (SOXX) climbed over +5% to a new record high. Notable gainers included Western Digital (WDC) at +15%, Marvell Technology (MRVL) at +11%, and Micron Technology (MU) at +10%. Seagate Technology (STX), ARM Holdings (ARM), Advanced Micro Devices (AMD), and Lam Research (LRCX) all saw gains exceeding 6%.

The “Magnificent Seven” also rallied on the risk-on shift. Meta Platforms (META) gained over +4%, while Amazon (AMZN) and Nvidia (NVDA) rose more than +3%. Alphabet (GOOGL) and Microsoft (MSFT) climbed over +2%, Apple (AAPL) rose over +1%, and Tesla (TSLA) closed up +0.74%.

Travel and leisure stocks surged as lower oil prices improved profitability outlooks. Royal Caribbean Cruises (RCL) rose over +6%, while United Airlines (UAL), Carnival (CCL), Alaska Air (ALK), Norwegian Cruise Line (NCLH), and American Airlines (AAL) all gained more than +3%.

Mining stocks climbed alongside rallies in gold, silver, and copper. Coeur Mining (CDE) and Hecla Mining (HL) rose over +8%, while Anglogold Ashanti (AU) gained over +6%. Newmont Corp (NEM) and Barrick Mining (B) rose over +5% and +4%, respectively.

Crypto-related stocks climbed as Bitcoin (^BTCUSD) rose over +4%. Coinbase (COIN) gained over +6%, and MicroStrategy (MSTR) rose over +5%, with MARA Holdings (MARA) and Riot Platforms (RIOT) also finishing higher.

Rideshare and delivery services saw gains as gasoline prices hit a two-month low. DoorDash (DASH) jumped over +11%, while Uber (UBER) and Lyft (LYFT) rose over +5%.

Energy stocks retreated on the oil price slump. APA Corp (APA) fell over -6%, and Marathon Petroleum (MPC), SLB Ltd (SLB), Exxon Mobil (XOM), and ConocoPhillips (COP) all dropped more than -4%. Chevron (CVX) led the Dow losers, falling more than -3%.

Other notable movers included Space Exploration Technologies (SPCX), which surged over +19% following a heavily oversubscribed $75 billion IPO. Datadog (DDOG) and Hawkeye 360 (HAWK) rose following analyst upgrades from Truist Securities and Jeffries, respectively.

On the downside, Elicio Therapeutics (ELTX) plummeted -72% after a Phase 2 pancreatic cancer vaccine study failed to meet its primary endpoint. Fox Corp (FOXA) fell over -16% following its $22 billion acquisition of Roku, and Old Dominion Freight Line (ODFL) dropped -3% after a downgrade by Citigroup.

Earnings Reports (6/16/2026)

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