Global markets erupted into one of the year’s most powerful single-day rallies on Monday, as a framework peace deal between the United States and Iran — including a commitment to reopen the Strait of Hormuz — sent oil prices plunging to a three-month low, drove equities to record highs from Tokyo to Frankfurt, and pushed gold to a near one-week peak.
Brent crude fell roughly five percent to around eighty-three dollars a barrel by midday, well below the May 2026 peak of one hundred and twenty-six dollars. The collapse in energy costs instantly repriced the global inflation outlook and reignited bets that central banks will hold rates steady at a wave of policy meetings scheduled for later this week.
Wall Street’s opening bell delivered a broad-based surge. The S&P 500 climbed one-point-nine percent to seven-thousand-five-hundred-seventy-three, the Nasdaq Composite jumped three percent past twenty-six-thousand-six-hundred-sixty-six, and the Dow Jones Industrial Average gained one-point-four percent to fifty-one-thousand-nine-hundred-twenty-two. The SPDR S&P 500 ETF rose alongside the index, while semiconductor names including Micron Technology and Western Digital extended their advance on renewed AI optimism.
European bourses hit all-time highs in lockstep. The STOXX 600 and the FTSE Eurofirst 300 both notched records, while Asia’s overnight session surged before the U.S. open. Bond yields fell across the curve, the U.S. dollar slipped to a ten-day low, and gold climbed two-point-seven percent to roughly four-thousand-three-hundred-thirty-four dollars an ounce. Silver gained three-point-seven percent and palladium added four-point-four percent. Bitcoin advanced two-point-five percent.
The trigger was a Truth Social post from President Donald Trump confirming the framework agreement and authorizing the toll-free reopening of the Strait of Hormuz, the chokepoint that carries roughly one-fifth of global oil supply. “The Deal with the Islamic Republic of Iran is now complete. Congratulations to all!” Trump wrote. “I hereby fully authorize the toll-free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”
The pact, confirmed earlier by Pakistani Prime Minister Shehbaz Sharif, is scheduled to be formally signed on Friday in Switzerland. Both Trump and Iran’s Deputy Foreign Minister indicated the strait would reopen after the Geneva signing. The fate of Tehran’s nuclear program, however, has been left to further negotiations — meaning the agreement is a ceasefire framework rather than a final settlement. Israel is not a signatory, and Iran has said traffic through the strait will be jointly regulated with Oman, a detail that tempered some of the initial euphoria.
Analysts framed the move as a structural shift in the 2026 inflation outlook. CBA’s Vivek Dhar placed a year-end Brent target of eighty dollars “assuming the strait does not close again,” warning that the trajectory still carries uncertainty tied to damage to oil and refinery assets. Saxo Bank strategist John Hardy called the development “about as supportive as you can get” for global markets, especially coming on the heels of last week’s record-setting seventy-five-billion-dollar SpaceX IPO, whose shares extended their blockbuster gains in midday trading.
Goldman Sachs, meanwhile, reiterated its Buy rating on Nvidia and said its calendar-year 2027 earnings estimates stand more than thirty percent above consensus, citing improved capital allocation and the company’s competitive edge in AI infrastructure. The bank argued Nvidia’s growth profile will be sustained into 2027, providing a fresh tailwind for the semiconductor complex that has powered much of the year-to-date rally.
Energy-exposed sectors, by contrast, faced selling pressure as the oil curve flattened. Refiners and drillers gave back gains accumulated during the May spike, while airlines and cruise operators — long punished by the surge in jet fuel — staged a relief rally. DraftKings shares moved higher as traders positioned for what one analyst called “one of the biggest economic and sports betting events in history”: the upcoming FIFA World Cup, hosted in the United States later this summer.
With Trump set to meet Middle Eastern leaders and hold a working session with Ukrainian President Volodymyr Zelenskiy at a G7 summit in France this week, traders are watching for follow-through diplomacy that could cement the energy normalization. The Hormuz reopening, if it holds, would also restore a critical lane for Gulf LNG exports, easing a parallel squeeze in European natural gas that has weighed on industrial output since the spring. Until then, the Monday session has already rewritten the playbook for the second half of 2026: cheaper oil, lower inflation risk, easing geopolitical premia, and a synchronous global bid for risk assets that few expected at the open. The trade, for now, is unmistakable — peace, even partial, is being priced in. Markets will spend the rest of the week deciding how durable that conviction really is.