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Wall Street erupted in a wave of enthusiasm Monday after news broke that the United States and Iran reached a provisional deal to reopen the Strait of Hormuz, calming a months-long geopolitical crisis and setting off major gains across the markets.

The Dow Jones Industrial Average surged more than 900 points, the S&P 500 rose roughly 1.5%, and the tech-heavy Nasdaq led the charge, up 2.3% in early trading.

The agreement, which President Trump described as “complete,” reignited investor confidence following weeks of turbulence linked to Middle East tensions.

Trump’s Truth Social post on Sunday declared the official end of hostilities, paving the way for the crucial oil passage to reopen by the end of the week.

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Iran’s deputy foreign minister Kazem Gharibabadi later confirmed the accord, saying Tehran and Washington will begin 60 days of negotiations to create a permanent peace framework.

Oil prices, which had soared during the standoff, tumbled sharply after the news. Benchmark Brent crude dropped 4.7% to around $83 a barrel, while West Texas Intermediate crude fell more than 5%, settling just above $80. The drop was welcomed on Wall Street as traders anticipated the move could ease inflationary pressures weighing on global growth.

Gold markets reacted in the opposite direction, climbing more than 2.5% to about $4,330 an ounce as investors sought safety amid shifting currency and yield dynamics.

The rally in precious metals reflected expectations that a softening oil market could give the Federal Reserve more maneuvering room on interest rates without triggering further economic shockwaves.

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“The big question now is how quickly this drop in oil prices translates into lower inflation,” said Tim Waterer, chief market analyst at KCM Trade. “If that happens, we might see a significant shift in the Fed’s tone over the next two months.”

Strategists at major trading firms including Pepperstone and Stifel Nicolaus warned, however, that the peace deal may offer only a short-term reprieve, rather than the beginning of a sustained rally.

They argued that uncertainties remain over Iran’s nuclear program, potential sanctions relief, and the long-term security of energy transport through the Strait of Hormuz.

Still, after what many investors considered a fraught and overextended bull market, Monday’s rally offered a moment of respite and renewed optimism that stability in global trade routes could curb energy-cost spikes.

It also arrived just as SpaceX’s blockbuster IPO—and subsequent run-up—was giving Wall Street a technological jolt not seen in years.

SpaceX shares, which already rocketed more than 19% during their market debut on Friday, jumped another 8% at the opening bell, lifting the company’s valuation beyond $2 trillion.

The historic listing has fed into a broader appetite for high-tech and aerospace stocks, echoing the early days of the AI boom.

Even as stock indexes pushed higher, inflation data and interest rate concerns continued to temper some of the exuberance. The Federal Reserve’s upcoming policy decision is attracting heavy scrutiny, with traders overwhelmingly expecting the central bank to keep rates steady this week. Data from CME’s FedWatch tool show a 98% probability that the Fed will hold rates unchanged.

Meanwhile, manufacturing data released Monday showed a slowdown in U.S. industrial output, holding flat in May after a small uptick in April.

That pause followed months of strong momentum tied to defense contracts and data center construction—a sign that while the economy remains resilient, growth may be cooling at the margins.

Global equity markets followed the U.S. lead. The MSCI Asia Pacific Index rose as much as 3.2%, with energy-importing nations across Asia posting broader gains.

A weaker dollar and lower Treasury yields reinforced optimism that the peace breakthrough would smooth global trade and cut costs for producers worldwide.

At the same time, oil market participants are watching closely to see whether transport through the Strait of Hormuz resumes without incident.

Roughly a fifth of the world’s oil supply passes through the narrow corridor, and even temporary blockages have historically caused severe price shocks.

“The reopening of Hormuz is incredibly significant for energy markets and inflation expectations,” said Peter Wynne, head of energy research at Harborview Analytics. “If shipping resumes smoothly, that could take several points off global inflation forecasts in a matter of weeks.”

Trump’s announcement also triggered a mild rally in U.S. Treasury markets, with yields easing modestly as investors priced in less near-term inflation risk. That helped lift several interest-sensitive sectors, including utilities and consumer staples.

For traders, the convergence of de-escalation in the Middle East and SpaceX’s electrifying debut created an almost perfect storm for bullish sentiment.

The mood across Wall Street was upbeat, with many forecasting continued momentum through the week unless new inflation data or geopolitical surprises intervene.

As peace negotiations take shape, the market will be watching whether the deal holds and if energy flows return to normal.

For now, investors are betting that a calmer, more predictable global stage could keep the bull market alive a little longer.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.