U.S. stock markets surged on Monday as oil prices and global bond yields fell, helping drive a broad risk-on move. The S&P 500 closed up 1.65%, the Dow Jones Industrial Average finished higher by 0.92%, and the Nasdaq 100 gained 3.06%, with all three posting strong momentum as investors responded to developments involving the U.S. and Iran.
The rally accelerated after reports that the U.S. and Iran agreed to end their war and reopen the Strait of Hormuz. President Trump said the strait would reopen following a peace deal signing in Switzerland, with 60 days of talks beginning on Iran’s nuclear program, while warning that the U.S. could restart military action if no nuclear agreement is reached.
Key takeaways
- Price move: The S&P 500 rose 1.65% and the Nasdaq 100 jumped 3.06%, while the Dow gained 0.92%.
- Catalyst: Falling WTI crude and lower government-bond yields coincided with news that the Strait of Hormuz would reopen after a U.S.-Iran deal.
- Market implication: Rate-sensitive growth stocks outperformed as investors priced in easing inflation expectations and weaker near-term risk from energy supply disruptions.
- Data wrinkle: Several U.S. reports came in weaker than expected, which weighed on stocks even as the oil and rates move provided support.
What drove the move
According to market data cited in the report, crude oil fell sharply on Monday—WTI dropped more than 4% to a three-month low—after the U.S.-Iran de-escalation announcement and the prospect of reopening the Strait of Hormuz. The selloff in oil fed through to bond markets, with the 10-year U.S. Treasury yield falling to a one-month low of 4.418% and easing inflation expectations.
While the geopolitical news provided the main tailwind for risk assets, several economic indicators also influenced trading. The U.S. June Empire State manufacturing survey for general business conditions fell to 5.7, worse than expectations of 13.7. May manufacturing production was unchanged month over month, below the expected 0.3% increase, and the June NAHB housing market index unexpectedly declined to 35 versus expectations for no change at 37. The report said the weaker-than-expected data was a bearish factor for stocks.
Against that backdrop, investors appeared to prioritize the rates and commodities channel—lower oil translating into a lower inflation path—over the immediate softness in parts of the U.S. economic release calendar.
Market reaction across assets
The risk-on tone extended beyond U.S. equities. The report said overseas markets also finished higher, with the Euro Stoxx 50 closing up 0.68% at a record high, China’s Shanghai Composite up 1.61%, and Japan’s Nikkei 225 gaining 4.99% to a new all-time high.
In the U.S. rates market, the report noted that 10-year Treasury yields fell as T-notes rallied to a one-month high. It attributed the supportive bond backdrop to the roughly 4% plunge in WTI, which it said reduced inflation expectations. However, safe-haven demand for Treasuries appears to have been limited by the sharp stock rally, according to the report.
European government bonds also moved lower. The report cited a 10-year German bund yield falling to 2.954% and a 10-year UK gilt yield ending the session at 4.812%.
Which stocks gained—and which lagged
Technology led the upside, supported by an appetite for AI and chip-related exposure. The report said the iShares Semiconductor ETF rose more than 5% to a new record high. Individual winners included Western Digital (up more than 15%), Marvell Technology (up more than 11%), Micron Technology (up more than 10%), and several other semiconductor names with gains ranging from about 4% to more than 7%, including ARM, AMD, and Qualcomm.
The report also highlighted broad participation among the Magnificent Seven, with Meta Platforms up more than 4%, Amazon and Nvidia up more than 3%, and Microsoft and Alphabet gaining more than 2%. Apple rose more than 1%, while Tesla gained 0.74%.
Energy-sensitive sectors moved in the opposite direction. With WTI falling more than 4%, the report said energy producers and related services declined, led by APA (down more than 6%), and including Marathon Petroleum and SLB (each down more than 4%), as well as Exxon Mobil, ConocoPhillips, and Valero Energy (down more than 3% to 4% range).
Transportation and travel names benefited from the oil decline. Airlines and cruise operators rose, with Royal Caribbean Cruises up more than 6% and multiple carriers up more than 3% or 1% depending on the company, as lower fuel costs improved earnings visibility. E-commerce and delivery also advanced alongside cheaper gasoline, with DoorDash up more than 11% and Uber and Lyft each up more than 5%.
Meanwhile, the report said mining stocks climbed as gold, silver, and copper prices rallied. Coeur Mining and Hecla Mining led with gains of more than 8%, while Newmont and other large producers also posted increases. Cryptocurrency-exposed equities rose alongside a higher Bitcoin price, with Coinbase and Strategy up more than 6% and 5%, respectively.
Not all risk assets participated. The report cited a sharp drop in Elicio Therapeutics after it said its Phase 2 study did not meet a pre-specified primary endpoint, and Fox Corp fell after paying $22 billion to acquire Roku. Old Dominion Freight Line also declined after a downgrade to sell from neutral by Citigroup.
Bigger picture: rates, oil, and the Fed path
Monday’s broad rally underscored how quickly markets are reacting to the interaction between energy prices and interest-rate expectations. The report said traders were discounting a roughly 4% chance of a 25 basis point rate hike at the next FOMC meeting on June 16–17, consistent with the idea that softer energy prices are reducing the urgency of tightening.
At the same time, the economic data misses suggest the market still has to reconcile growth uncertainty. For investors, the key question is whether the oil-driven decline in inflation expectations can offset weakening signals in manufacturing and housing sentiment.
What to watch next
Investors will likely focus on whether the geopolitical de-escalation around Iran continues to support energy-price stability and broader risk appetite. On the U.S. calendar, the report listed earnings for John Wiley & Sons and La-Z-Boy. Separately, further Fed commentary and upcoming macro releases could quickly determine whether Monday’s rates and oil-driven rally extends.
