By US stocks opened higher on Monday as investors welcomed signs of a potential agreement between the United States and Iran to end their conflict, while continued enthusiasm surrounding SpaceX’s blockbuster market debut added to the positive sentiment.
The Dow Jones Industrial Average climbed 621 points, or 1.21%, while the S&P 500 advanced 1.5%.
Nasdaq Composite led the gains, rising 2.37% as technology and artificial intelligence-related stocks moved higher.
The rally followed reports that Washington and Tehran had reached a preliminary framework aimed at ending the conflict and reopening the Strait of Hormuz, a key global shipping route.
According to reports, the agreement could be formally signed in Switzerland on Friday.
Iran peace hopes push oil prices lower
Investor sentiment received a boost after President Donald Trump announced that an agreement with Iran was “now complete.”
Pakistan Prime Minister Shehbaz Sharif later said the memorandum of understanding would be signed later this week.
The prospect of renewed oil flows from the Middle East sent crude prices sharply lower.
US crude fell about 5% to around $80 per barrel, while broader energy markets dropped to their lowest levels since March.
Lower oil prices lifted shares of companies that typically benefit from reduced fuel costs.
United Airlines rose 7% in trading, while Delta Air Lines and American Airlines each gained 4.3% and 3.8% respectively .
Cruise operators Norwegian Cruise Line and Carnival also advanced roughly 5%.
Energy producers moved in the opposite direction.
Shares of Exxon Mobil and Chevron each declined more than 4% as investors adjusted to the prospect of weaker crude prices.
SpaceX momentum continues after historic debut
Markets also remained focused on SpaceX after the Elon Musk-led company completed one of the most closely watched public offerings in recent years.
SpaceX shares rose another 5.2% in trading after surging more than 19% during their Nasdaq debut on Friday.
The company ended its first trading day with a market capitalization exceeding $2 trillion.
The successful launch has strengthened confidence in the IPO market ahead of several highly anticipated listings expected later this year.
Analysts said the smooth debut could provide a template for future public offerings, including potential listings from OpenAI and Anthropic.
AI stocks lead gains ahead of Fed meeting
Technology and semiconductor stocks also advanced as investors rotated back into AI-related names.
Micron surged 7.8% after several brokerages raised their price targets on the stock.
Nvidia gained 2.5%, Intel added 4%, and Marvell Technology rose 4.1% in trading.
Meanwhile, investors continued to monitor the upcoming Federal Reserve policy meeting, the first under Chair Kevin Warsh.
Markets overwhelmingly expect policymakers to leave interest rates unchanged this week, although traders remain focused on any signals regarding the future path of monetary policy.
The CBOE Volatility Index, often referred to as Wall Street’s fear gauge, fell to a more than one-week low, reflecting improving investor confidence as geopolitical concerns eased and growth-focused sectors regained momentum.
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