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Update: Equity Markets Rally Intraday, Oil Tumbles Following US-Iran Deal

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Update: Equity Markets Rally Intraday, Oil Tumbles Following US-Iran Deal

(Updates with latest market prices and developments.)

US benchmark equity indexes were higher intraday, while oil prices sank as markets cheered an agreement between Washington and Iran to end their war and reopen the crucial Strait of Hormuz.

The Nasdaq Composite was up 3.1% at 26,677.8 after midday Monday, while the S&P 500 rose 1.9% to 7,569.3. The Dow Jones Industrial Average gained 1.3% to 51,878.1. Most sectors were in the green, led by technology's 3.3% advance, while energy saw the steepest drop.

On Sunday, US President Donald Trump said that a deal with Iran was "complete" and that he authorized the immediate removal of the US naval blockade of Iranian ports. In a separate social media post, Trump said the Strait of Hormuz will reopen for mine removal upon the signing of the peace agreement, scheduled for Friday in Switzerland.

The strait has been effectively shut since the end of February, when the US and Israel launched joint strikes on Iran.

West Texas Intermediate crude oil was down 5.3% at $80.41 a barrel intraday Monday, while Brent fell 4.9% to $83.02.

"The market driver is an alleged peace framework between the US and Iran that does have the advantage of getting oil flowing through the Strait of Hormuz, at least for now," Scotiabank said in a note.

Separately, Rystad Energy said the US-Iran peace framework has lifted sentiment, but it will take time for oil supply to improve meaningfully.

US Treasury yields were lower intraday, with the two-year rate down 2.5 basis points at 4.06% and the 10-year rate falling 1.5 basis points to 4.47%.

The Federal Reserve is scheduled to kick-off its two-day monetary policy meeting Tuesday. 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.

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.

"We have been saying since early March the energy price increase and potential supply disruptions (amid the Iran war) widened the potential outcomes for the future path of the funds rate, including rate hikes," UBS said in a note.

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.

"Costly and inefficient regulatory policy is clearly impeding the ability of builders to increase the housing supply," NAHB Chief Economist Robert Dietz said. "Easing permitting bottlenecks, density limits and inefficient zoning rules would help reduce costs and support the housing growth the nation needs."

SpaceX (SPCX) was up 14% intraday, after the Elon Musk-led company finished its trading debut on Friday up 19%.

Certain other big tech names were also higher intraday Monday, with Nvidia (NVDA) up 3.5%, among the best performers on the Dow. Microsoft (MSFT) rose 2.3%.

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 were down 16% and 15%, respectively, the worst performers on the S&P 500, while Roku fell 1.8%.

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 shares were up 4.1%.

Accenture (ACN), Jabil (JBL) and Kroger (KR) are scheduled to report their latest quarterly financial results later this week, along with others.

US markets will be closed Friday for the Juneteenth National Independence Day holiday.

Gold was up 2.9% at $4,360.80 per troy ounce, while silver climbed 3.6% to $70.42 per ounce.

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