(Updates with market moves at the end of the day.)
The Dow Jones Industrial Average notched a new all-time high on Monday as a framework between the US and Iran to reopen the crucial Strait of Hormuz sent oil prices tumbling.
The Dow rose 0.9% to settle at 51,671, topping its previous closing high recorded on June 4. The Nasdaq Composite jumped 3.1% to 26,683.9, while the S&P 500 climbed 1.7% to 7,554.3 -- both indexes advancing for a third consecutive session.
Most sectors were in the green, led by technology's 3.4% gain, while energy saw the steepest drop.
US markets will be closed Friday for the Juneteenth National Independence Day holiday.
The US and Iran have reached an agreement to end their war and reopen the Strait of Hormuz after more than three months of conflict that disrupted regional stability and global shipping routes.
The strait -- the world's most important chokepoint for crude flows -- has remained effectively closed since the US-Israel war with Iran began at the end of February.
West Texas Intermediate crude oil was down 4.1% at $81.39 a barrel in Monday late-afternoon trade, while Brent fell 4.1% to $83.73.
In the US, gasoline prices averaged $4.065 per gallon on Monday, compared with $4.164 a week earlier and $4.528 a month ago, according to AAA, a travel organization that tracks fuel prices in the country.
While the US-Iran agreement lifts sentiment, analysts flagged potential implementation risks.
US Treasury yields were lower, with the two-year rate last down 1.4 basis points at 4.08% and the 10-year rate falling 1.1 basis points to 4.48%.
The Federal Reserve is scheduled to kick-off its two-day monetary policy meeting Tuesday, with Chair Kevin Warsh at the helm for the first time. Policymakers are widely expected to leave their benchmark lending rate unchanged Wednesday, which would mark their fourth consecutive pause, according to the CME FedWatch tool.
"We expect the Warsh Fed to move slowly on interest rates, especially with expectations for an end to the war," D.A. Davidson said. "The Fed, however, could remove its easing bias (a view that rates will be lower over the medium term)."
The central bank's so-called "dot plot" may signal no interest rate cuts until 2028, said UBS Securities, which flagged the possibility of a tighter monetary policy amid the energy price shock stemming from the Middle East conflict.
In economic news, US industrial production increased less than estimated in May as nondurable manufacturing fell, while mining output increased, Fed data showed.
US homebuilder confidence declined this month as rising material costs and high mortgage rates stoked affordability concerns, the National Association of Home Builders and Wells Fargo said.
SpaceX (SPCX) surged 20%, after the Elon Musk-led company finished its trading debut on Friday up 19%.
Nvidia (NVDA) rose 3.5%, the second-biggest gainer on the Dow. Nvidia is looking to raise at least $20 billion from its first corporate bond sale since 2021, Bloomberg reported, citing people with direct knowledge of the matter.
Micron Technology (MU) shares deserve a higher valuation amid a stronger memory cycle driven by artificial intelligence demand and tight industry supply, RBC Capital Markets said. The brokerage raised its price target for Micron to $1,200 from $525 and maintained an outperform rating.
Micron's stock rallied 11%.
In company news, Fox (FOX, FOXA) agreed to acquire Roku (ROKU) in a cash-and-stock deal that values the TV streaming platform at about $22 billion, creating a media and technology entity with one of the largest streaming businesses in the US.
Fox's class A and B shares slid about 17% and 15%, respectively, the worst performers on the S&P 500, while Roku fell 1.9%.
Payoneer (PAYO) agreed to be acquired by Canada's Nuvei in an all-cash transaction valued at about $2.75 billion, creating a global platform for local and cross-border commerce. Payoneer climbed 4.2%.
Accenture (ACN), Jabil (JBL) and Kroger (KR) are scheduled to report their latest quarterly financial results later this week.
Gold was last up 2.5% at $4,342.80 per troy ounce, while silver rose 3.4% to $70.29 per ounce.
