Dow hits record high on US-Iran deal optimism, oil prices slide

Wall Street's main indexes rose on Monday, with the Dow touching an intraday high after the United States and Iran struck a preliminary agreement to end the Middle East war and reopen the Strait of Hormuz, leading to an easing of inflation fears as crude oil prices dropped.

The deal framework - expected to be formally signed in Switzerland on Friday - did not address key issues such as Tehran's nuclear program and the Israel-Lebanon conflict.

Still U.S. crude futures plummeted 5% following the news and hit their lowest level since March, aiding shares of energy-sensitive airline and cruise stocks and hurting energy shares.

Rate-sensitive technology stocks also rallied as investors were more comfortable taking on riskier bets.

"Markets are higher on a classic relief rally. We have a US-Iran deal that's driving oil sharply lower. This is easing inflation fears and basically pushing investors back into risk assets like technology," said Gene Goldman, chief investment officer at Cetera Investment Management, in El Segundo, California.

The three main indexes were on track for a third consecutive session of gains, recovering after geopolitical tensions and a pullback in AI-related stocks had put Wall Street's record climb on pause more than a week ago.

At 02:22 p.m. the Dow Jones Industrial Average rose 613.79 points, or 1.20%, to 51,816.05, the S&P 500 gained 130.15 points, or 1.75%, to 7,561.61 and the Nasdaq Composite gained 767.50 points, or 2.97%, to 26,656.35.

A resumption of oil flows from the Middle East and easing crude prices could give the U.S. Federal Reserve, which is grappling with inflation, room to hold interest rates steady instead of raising borrowing costs.

Along with the Iran deal another big focus for the week would be the U.S. central banks' next policy update, which is due on Wednesday, after Chair Kevin Warsh's first policy meeting since he took over from Jerome Powell last month. The meeting follows May inflation data that showed higher energy costs filtering into consumer prices.

Traders expect the Federal Reserve to leave interest rates unchanged this week, but are pricing in a 42% probability for a 25-basis-point hike by the end of the year, according to CME Group's FedWatch tool.

In individual stocks, SpaceX's shares were up 15% after the Elon Musk-led firm ended its blockbuster IPO with a more than $2 trillion valuation.

Investors had been relieved on Friday by its strong market debut, hoping that its landmark Nasdaq launch boded well for the highly anticipated OpenAI and Anthropic IPOs expected later this year.

Elsewhere, airlines were among the leading transport sector gainers with United Airlines up 4.5%. Norwegian Cruise rose more than 3%, while Carnival Corp advanced 3%.

Seven of the 11 major S&P 500 sectors were in the green, with the S&P 500 tech index leading the advance with a more than 3% gain. The S&P 500 energy index was its biggest laggard, down more than 3%.

The CBOE Volatility Index, Wall Street's fear gauge, slipped earlier to a more than one-week low at 15.98 points. It had risen to a more than two-month high the previous week.

The Philadelphia SE Semiconductor index hit a record high and was last up 5.4%, with chip giant Nvidia up more than 3%.

In other movers, Fox tumbled 17% after the company said it would buy Roku in a $22 billion deal. Roku shares fell 1.4%.

Advancing issues outnumbered decliners by a 2.01-to-1 ratio on the NYSE where there were 441 new highs and 80 new lows. On the Nasdaq, 3,037 stocks rose and 1,761 fell as advancing issues outnumbered decliners by a 1.72-to-1 ratio. The S&P 500 posted 38 new 52-week highs and 3 new lows.

(Reporting by Sinéad Carew, Twesha Dikshit, Joel Jose and Johann M Cherian in Bengaluru; Editing by Rashmi Aich, Pooja Desai and Aurora Ellis)

Copyright Reuters or USA Today Network via Reuters Connect.

This story was originally published June 15, 2026 at 11:48 AM.