The US and Iran agreement on the reopening of Ormuz Strait It set off a rally on Wall Street, with investors betting on deescalating energy costs and inflationary pressures that forced central banks internationally to raise interest rates. It was a strong market interest, especially in the technology industry, that continued to... dance at the pace of SpaceX.
On the dashboard, Dow Jones "took" a new record at 51,671 units with a rise of 0.92%, while intra-sessions had reached a... breath from the 52,000-unit milestone. S&P 500 was reinforced by 1.65% at 7.554 units and Nasdaq made a 3.07% jump touching 26,683 units.
"There was huge euphoria today in the financial markets. Shares, precious metals and cryptocurrency recorded a strong risk take-over rally. Investors bet that the US-Iran peace agreement will pave the way for new historically high stock markets," said Michael O'Rourke, chief strategic analyst for Jones Trading.
Indeed, with the American slow falling to $81 a barrel and Brent just over 83, market concerns over the course of inflation were limited. It is typical that as the markets reduced the stakes for new interest rates increases by Federal Reserve, the yields of 2 years American bonds declined to 4.06% while the 10 years were split to 4.46%.
The positive reaction of the markets came after the revelation that United States President Donald Trump, and Vice President J.D. Vance electronically signed the memorandum of understanding with Iran, while the official signing ceremony will be held next Friday in Switzerland.
Commenting on developments Trump said the Straits of Hormuz "have already been partially opened" and that "on Friday it will be fully open". However, many points have not been clarified, and the text of the agreement has not even been known.
So far the two sides have only confirmed the reopening of the Straits of Ormuz and the lifting of the American blockade.
"The agreement between the US and Iran is an important development and is positive for the markets, as the continuous changes in the negotiations had caused additional uncertainty and variability," argued Landsberg's Michael Landsberg Bennett Private Wealth Management describing the agreement as a "significant cut" for markets, despite the fact that many issues remain open.
The assessment of Ulrice Hoffman-Burhardy of UBS was similar. "The volatility can remain short-term as markets evaluate the implementation and duration of the agreement, but we still believe that robust growth and strong corporate profits will continue to support shares," he said.
According to Morgan Stanley analysts under Michael Wilson, American shares could be further strengthened through a capital shift to more circular branches of the economy, which had been left behind during the war.
A similar assessment was made by JPMorgan's Mislav Mateika, who considers that the cyclical stock placement strategy may continue to yield by the end of the year, provided that geopolitical tensions will degrade and inflation and corporate profits remain stable.
At the same time, investor attention is now turning to the Federal Reserve meeting which ends on Wednesday.
The deescalation of energy risk comes little from Fed's first monetary policy decision under its new president, Kevin Wars.
Economists expect the central bank to maintain the key interest rate in the 3.5%–3.75% range, in order to assess the impact of the war's energy shock on the American economy.
However, following the latest diplomatic developments and the de-escalation of oil prices, the money markets now price lower chances of a new interest rate increase by December.
"Just last week markets discounted two interest rate increases until early 2027. Now the data has changed and investors see only one possible increase by December and possibly no change in the first half of 2027," said AJ Bell's Russ Mold.
On the business front, SpaceX continued its impressive start on the stock market, with the stock recording a new increase on its second trading day and raising its profits close to 40%, after the historic debut that highlighted it to one of the most prestigious listed companies worldwide.
The space company is now valued at more than 2.1 trillion. dollars, while its founder, Elon Musk, became the first man in the world with a fortune exceeding $1 trillion.
At the same time, artificial intelligence companies Anthropic and OpenAI have submitted confidential requests for public registration and are considered likely to be admitted to the stock exchange within the year.
In the big winners and Nvidia, who announced that it intends to raise $25 billion through the issue of high credit rating bonds, with demand exceeding more than three times the amount offered, confirming the ongoing investment thirst for companies associated with artificial intelligence.
At the same time, Fox agreed to buy Roku in a $22 billion deal including debt, creating a new powerful player in the television and streaming field with advertising support. The deal gave impetus to Roku's stock, but led to a free fall of more than 15% the share of the conservative midday group.
In the day's deal and Salesforce's acquisition of artificial intelligence firm Finn, against about $3.6 billion, which generated profits in its share.
Delta Air Lines also recorded a strong rise, as airlines are among the biggest beneficiaries of fuel prices reduction, while improving the investment climate helped bank shares starring Goldman Sachs and JPMorgan Chase.
On the contrary, Fiserv's share was under strong pressure following the surprise departure of its CEO, Michael Lyons, who takes over the leadership of Truist Financial.
Lower were oil, such as Exxon Mobil and Chevron, following the deescalation of black gold prices, while under pressure Newmont mining was also found, as limiting geopolitical concerns reduced investment interest in defensive positions associated with gold and precious metals.
Source: Newmoney. gr