Prime Highlights :
- U.S. and Iran reach early agreement easing tensions and reopening key strait.
- Oil prices fall to a three-month low, lifting airline and cruise shares.
Key Facts :
- SpaceX completed its IPO at a valuation above $2 trillion.
- Chip stocks including Micron and Nvidia gained in early trading.
Background :
Wall Street futures rose at the start of the week after the United States and Iran reached an early agreement aimed at easing tensions and reopening the Strait of Hormuz, sending oil prices down to their lowest level in three months.
The preliminary framework did not address other major issues, including Iran’s nuclear programme and tensions between Lebanon and Israel. The agreement is expected to be formally signed in Switzerland by the end of the week.
Max Kettner, chief multi-asset strategist at HSBC Global Investment Research, said that if the agreement between the two countries proves credible and lasting, markets are likely to view it positively, while any setbacks may have a smaller impact than usual on riskier assets.
Chip stocks gained ground in early trading. Micron rose 8.2 % after several brokerages raised their price targets, while Nvidia, Intel and Marvell Technology also advanced.
Oil prices fell more than 4 % to their lowest level since March, supporting airline and cruise line shares that are sensitive to energy costs. United Airlines, Delta Air Lines, American Airlines, Norwegian Cruise Line and Carnival Corp all posted gains.
Analysts said Brent crude could settle near $80 a barrel as energy flows resume through the Strait and regional infrastructure is restored.
Recent data showed higher energy costs affecting consumer prices, increasing focus on the Federal Reserve’s upcoming policy meeting. The two-year Treasury yield slipped to a two-week low, while a key measure of market sentiment eased to its lowest level in more than a week.
The Fed is expected to keep interest rates unchanged, though traders anticipate a possible rate increase by year-end.
Dow E-minis rose nearly 1 %, S&P 500 E-minis gained over 1 %, and Nasdaq 100 E-minis climbed more than 2 % in early trading. SpaceX shares rose 5.6 % following the completion of its initial public offering at a valuation above $2 trillion, setting a positive tone ahead of expected listings by OpenAI and Anthropic later this year.
