The major U.S. index futures are indicating a significantly higher open on Monday, suggesting that stocks are poised to continue the robust upward trend observed in the last two sessions. The upward momentum on Wall Street follows the announcement that the U.S. and Iran have reached an agreement to conclude over three months of conflict. President Donald Trump stated in a post on Truth Social that a deal with Iran is “now complete” and has authorised the “toll free opening” of the Strait of Hormuz along with the immediate removal of the U.S. blockade of Iranian ports. Trump later clarified that the Strait of Hormuz would reopen upon the signing of the deal on Friday for the purpose of mine removal. The agreement reportedly extends the U.S.-Iran ceasefire for 60 days, with the countries set to use that window to negotiate over Iran’s nuclear enrichment and the disposal of its highly enriched uranium.
U.S. crude oil futures have dropped over 5 percent in response to the news, alleviating worries regarding the inflation outlook. “Prior to the deal, investors had become increasingly concerned that higher energy costs would feed into broader inflation pressures and potentially force policymakers into additional tightening,” stated Daniela Hathorn. “The sharp decline in oil prices does not eliminate inflation risks altogether, but it does reduce some of the urgency surrounding them,” she added. “This week holds particular significance as the Federal Reserve convenes for the first time under the leadership of new Chair Kevin Warsh.” Following the rally observed throughout Thursday’s session, stocks experienced additional gains during trading on Friday. The major averages exhibited volatility early in the session but maintained a predominantly positive stance throughout the day. The Dow increased by 353.51 points, representing a 0.7 percent rise, closing at 51,202.26. The S&P 500 saw an uptick of 37.16 points, or 0.5 percent, finishing at 7,431.46. Meanwhile, the Nasdaq gained 79.18 points, equivalent to a 0.3 percent increase, ending at 25,888.84.
For the week, the major averages all saw an increase of 0.7 percent. Optimism regarding a resolution to the conflict in the Middle East has bolstered strength on Wall Street. However, traders appeared hesitant to engage in more substantial actions due to mixed messages from President Donald Trump. Trump cancelled a previously planned attack on Iran on Thursday and indicated that a peace agreement was imminent, leading to a surge in stock prices. In a post on Truth Social this morning, Trump asserted that the terms of the deal leaked by Iran have “NOTHING to do with the terms that were agreed to, in writing.” Trump characterised the Iranians as “very dishonourable people to deal with,” further stating, “With them, there is no such thing as dealing in good faith.” Reports have indicated that the memorandum of understanding between the U.S. and Iran stipulates the immediate reopening of the Strait of Hormuz without tolls, alongside sanctions relief for Iran contingent upon compliance. The agreement is said to extend the ceasefire for a duration of 60 days, encompassing Lebanon, while nuclear negotiations are scheduled to take place within that period.
A report indicated that the U.S. and Iran could potentially finalise the agreemen t during the upcoming Group of Seven world leaders summit next week. An X post from Pakistani Prime Minister Shehbaz Sharif stating that a “final, agreed upon text of the peace deal has been reached” contributed to the optimistic outlook. Traders also monitored shares of SpaceX, as the rocket maker made its debut on the Nasdaq in the largest initial public offering in history. SpaceX experienced a remarkable increase of 19.3 percent during the trading session. Gold stocks experienced a significant increase in tandem with the rising price of the precious metal, leading to a 3.1 percent surge in the NYSE Arca Gold Bugs Index. A significant decline in crude oil prices also played a crucial role in bolstering airline stocks, as evidenced by the NYSE Arca Airline Index’s impressive rise of 2.8 percent. There was notable strength in financial, computer hardware, and semiconductor stocks, whereas some weakness was observed in biotechnology and utilities stocks.