U.S. stocks rallied sharply on Monday as investors welcomed news of a breakthrough agreement between the United States and Iran, while newly public SpaceX continued its remarkable stock market debut.
The Dow Jones Industrial Average gained more than 540 points, or 1.1%, reaching a new all-time intraday high. The S&P 500 climbed 1.7%, while the Nasdaq Composite surged 2.9%, putting the technology-heavy index on track for its strongest daily performance since March.
A major catalyst for the market's advance was President Donald Trump's announcement that an agreement to end the conflict between the United States and Iran had been finalized. According to reports, the memorandum of understanding has already been signed electronically and is expected to be formally signed in Switzerland later this week.
The geopolitical breakthrough also contributed to a sharp decline in oil prices after Trump authorized the reopening of the strategically important Strait of Hormuz. U.S. crude oil futures fell approximately 5%, dropping to around $80 per barrel.
Market strategist Brian Mulberry of Zacks Investment Management said the development could reduce inflationary pressures and support expectations that the Federal Reserve will keep interest rates unchanged.
According to the CME FedWatch Tool, futures markets currently imply a greater than 98% probability that interest rates will remain unchanged through the end of the year.
Meanwhile, SpaceX shares jumped another 15% after soaring 19% during their public market debut on Friday. Investors continued to pour money into the aerospace company as it prepares for inclusion in several major stock indexes.
Analyst Dan Niles of Niles Investment Management noted that demand for SpaceX could remain strong as index providers begin adding the company to their benchmarks. However, he cautioned that valuation will eventually become a more significant factor for investors.
The company is expected to join the Russell Indexes on June 26, followed by inclusion in MSCI indexes and the Nasdaq-100 Index shortly thereafter.
The strong performance of SpaceX also boosted shares of Goldman Sachs, which served as the lead-left underwriter for the company's initial public offering. Goldman shares gained around 1.5% on Monday after advancing more than 2.6% during Friday's session, making the bank one of the strongest performers within the banking sector.
With easing geopolitical tensions, falling oil prices, and continued enthusiasm surrounding high-growth technology stocks, Wall Street began the shortened trading week with renewed optimism and record-setting momentum.
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