US stock market rises on optimism over US-Iran deal to ease energy crisis
U.S. stock markets experienced a significant rally, driven by optimism surrounding a tentative agreement aimed at ending the ongoing U.S.-Israel war with Iran. This development is anticipated to enhance the stability of energy supply chains that have been disrupted for months in the strategic Strait of Hormuz, a crucial maritime route for global oil.
On Monday, the S&P 500 index climbed by 1.7 percent, inching closer to its all-time high, while the technology-focused Nasdaq Composite surged by an impressive 3.1 percent. This uptick in the Nasdaq was buoyed by a notable 19.6 percent surge in SpaceX shares, following the company’s historic market debut, which not only marked a pivotal moment in its growth trajectory but also catapulted CEO Elon Musk into the ranks of the world’s first trillionaires.
The Dow Jones Industrial Average also reflected this positive sentiment, increasing by 0.9 percent and reaching a record closing high. Additionally, Brent crude futures, which serve as the primary benchmark for global oil prices, dropped nearly 5 percent to just above per barrel—the lowest point recorded since the onset of the conflict in the region.
Asian stock markets continued this upward trend on Monday, despite a somewhat sluggish start. Japan’s Nikkei 225 briefly crossed the 70,000 mark for the first time before settling, showing a 0.6 percent increase as of 04:45 GMT. South Korea’s KOSPI index, noted as the best-performing major index this year, registered a rise of over 2.1 percent, while Taiwan’s TAIEX also grew by 0.6 percent. However, Hong Kong’s Hang Seng Index faced a decline of 1.25 percent.
Experts, including a senior analyst from a media source, indicated that the announcement regarding the U.S.-Iran deal prompted a shift in investor sentiment, driving them toward increased market engagement. They observed that the resolution of conflict often alters the risk dynamics for investors, leading to a renewed confidence in the market.
Even with the promising news emanating from diplomatic negotiations, analysts caution that full normalization of energy flows may take considerable time. A backlog of approximately 500 vessels currently awaits passage through the Strait of Hormuz, which is vital as it typically accounts for about one-fifth of the global oil and liquefied natural gas supply. Ensuring the safety of these waterways remains a pressing concern, particularly in light of potential Iranian naval threats.
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