Stocks Leap Worldwide, And Oil Prices Drop After U.S. And Iran Reach Tentative Deal On War
NEW YORK (AP) — Stock markets rose around the world Monday and oil prices eased after the United States and Iran reached an interim agreement on oil. extend the ceasefire and reopen Strait of Hormuz to ensure the resumption of global crude oil flows.
This time, the S&P 500 index rose 1.7 percent on hopes that the announcement of the Iran-US deal would mean a long-term solution to the worsening conflict. inflation around World. The Dow Jones Industrial Average rose 468 points, or 0.9%, to a record high, while the Nasdaq composite rose 3.1%.
Stocks started to rise as the barrel price of Brent crude oil fell 4.8 percent to $83.17, returning to its early March level. While that’s still above its pre-war price of about $70, it’s still lower than the $100-plus it cost a few weeks ago. The hope is that lower oil prices will ease the pressure on households and businesses forced to pay higher prices for everything from food to fuel to fertilizer because of the war with Iran.
Iran has ratified the agreement, but it does not include a final agreement on issues such as Iran’s nuclear program. Negotiations on this issue are expected to continue for the next 60 days, leaving room for disruptions that could disrupt the agreement. Even if the Strait of Hormuz fully reopens on Friday as expected, it will likely take a long time. It takes months for the energy sector to return to full speed.
However, for now, there has been relief in financial markets around the world.
On Wall Street, stocks of companies with big fuel bills were instant winners. United Airlines flew 3.9% higher and cruise operator Royal Caribbean Group was up 6.6%.
Company shares crashed artificial intelligence industry also jumped. These stocks have yo-yoed in recent weeks roaring to records with suddenly turns down. The concern is whether such stocks are rising too high, too fast, due to the AI craze, and whether their shaky moves sometimes change direction by the hour.
Micron Technology rose 10.8% and Advanced Micro Devices rose 7%. Nvidia’s 3.5 percent rise has been the strongest force pushing the S&P 500 upward, as the AI chip company is Wall Street’s most valuable company, giving it more weight than others in the index.
SpaceXElon Musk’s rocket company, which also owns AI company xAI, rose 19.6% in its second day of trading on Wall Street. Its successful debut on Nasdaq showed that there is still plenty of demand for AI among investors. The market has given SpaceX a total value of more than $2.1 trillion; making it larger than Exxon Mobil, Bank of America and Coca-Cola combined.
In the bond market, Treasury yields have fallen in hopes that lower oil prices will remove pressure on central banks to raise interest rates.
The yield on the 10-year Treasury note fell to 4.47% from 4.48% at the end of Friday.
Last week, the European Central Bank became the first major bank in the world to raise interest rates due to the war with Iran. High interest rates can limit inflation, but they also slow economies and lowered the prices of all kinds of investments, including stocks and cryptocurrencies. They have particularly hit investments seen as the most expensive, and some critics have characterized the AI industry as a bubble in which investments have ballooned too much.
The Fed will announce its final decision on interest rates later this week, and it will be the first decision under its new chairman, Kevin Warsh. Investors are almost certain the Fed will keep its key interest rate steady after its two-day meeting ending Wednesday.
Investors were increasing bets that the Fed might have to raise interest rates this year as inflation soars. How solid the US job market remains. But the interim agreement between the US and Iran means traders are betting only 57% on the chance of a rate hike this year, down from 71% a week ago, according to data from CME Group.
Elsewhere on Wall Street, Roku fell 1.9% after the company announced this. Fox Corp. buys streaming pioneer in a cash and stock deal worth approximately $22 billion.
Roku’s shares were already up 20% on Friday, when media reports emerged about a deal that would give Fox access to the Roku channel, first-party data and more than 100 million global streaming households. Fox’s shares fell 16.8%.
Overall, the S&P 500 rose 122.83 points to 7,554.29. The Dow Jones Industrial Average rose 468.77 to 51,671.03, and the Nasdaq composite index rose 795.10 to 26,683.94.
In foreign stock markets, indices in Asia and Europe started to rise. Japan’s Nikkei 225 index increased by 5%, making one of the world’s biggest gains and finishing at a record.
“This is great news,” said Takashi Hiroki, chief strategist at Monex. “Buying by foreign investors is driving the market in anticipation of easing tensions related to the situation in the Middle East.”
South Korea’s Kospi rose further, up 5.2%, thanks in part to ongoing rallies for AI winners like Samsung Electronics.
The London FTSE 100 Index was an outlier, losing 0.4%.
AP Business Writers Matt Ott and Elaine Kurtenbach and Senior Producer Mayuko Ono contributed to this report.
