US stock indices rose sharply on Monday after US President Donald Trump announced an agreement to end the war between the United States and Iran, boosting investors' appetite for risk and pushing major indices to broad gains.
The Dow Jones Industrial Average rose 607 points, or 1.2%, to its highest level ever during daily trading.
The Standard & Poor's 500 index also rose by 1.3%, while the Nasdaq Composite jumped by 2.2%, strongly supported by technology and growth-related stocks.
These gains came amid a wave of widespread optimism that swept global markets following a decline in geopolitical risks that had dominated the economic landscape in recent months.
Broad global gains following the agreement
The upward trend was not limited to the American markets only, but extended to global markets, which received the agreement with great relief.
In Japan, the Nikkei 225 index jumped to its highest daily level ever, before ending the session up 5%.
South Korea’s Kospi index also rose by 5.2%, in one of its strongest sessions this year.
In Hong Kong, the Hang Seng Index rose by 0.5%.
In Europe, the pan-European STOXX 600 index rose 0.6%, as investor sentiment improved and concerns about energy markets and global trade eased.
This performance reflects a global bet that ending the conflict between Washington and Tehran could open the door to a new phase of economic stability and alleviate the pressures that markets have faced in the past period.
The peace agreement boosts confidence and puts pressure on oil.
US President Donald Trump announced on Sunday evening via social media that the agreement with Iran was complete, indicating that an understanding had been reached to end the war between the two countries.
The memorandum of understanding is scheduled to be formally signed next Friday in Switzerland, according to Pakistani Prime Minister Shahbaz Sharif, whose country played the role of mediator between the two parties.
Trump also confirmed that he had issued an authorization to reopen the Strait of Hormuz, one of the world's most important maritime routes for transporting oil.
This announcement led to a sharp drop in oil prices, after fears of global supply disruptions subsided.
During trading on Monday, U.S. Vice President J.D. Vance said in an interview with CNBC that he expects the strait to remain open without transit fees for a long time.
US crude fell by about 5% to settle near $80 a barrel, as markets priced in the possibility of oil flows gradually returning to normal.
Regional tensions nearly derailed the agreement.
The announcement of the agreement came hours after uncertainty escalated following an exchange of fire between Israel and the Iranian-backed Hezbollah in Lebanon.
These developments have raised doubts about the possibility of completing the agreement and successfully reaching the finish line.
However, the mediators' success in maintaining the course of negotiations allowed both sides to move forward towards reaching a final understanding.
SpaceX continues to steal the spotlight
US markets also benefited from the strong momentum generated by SpaceX's historic IPO. The company's shares rose 6% on Monday after surging nearly 19% in their first trading session last Friday.
The stock's strong performance has raised the company's market capitalization to more than $2 trillion.
This listing is one of the largest and most important public offerings in the history of financial markets, attracting the attention of investors around the world.
Ivan Schlossman, a partner at Soro Capital, said that the successful SpaceX IPO is a positive sign of continued investor interest in companies associated with innovation and technology.
He added that the stock's strong performance reflects the high demand and strong desire among investors to invest in companies that are leading future growth waves.
Investors' eyes are on the Federal Reserve
Despite the prevailing optimism in the markets, investors continue to monitor the economic data expected this week. This data includes housing sector indicators and retail sales figures, which may provide further clues about the strength of the US economy.
Investors are also keenly awaiting the US Federal Reserve meeting and its anticipated decision on monetary policy.
