US-Iran Deal Ignites Global Stock Rally, Oil Drops

This deal, initially announced by Trump, aims for a long-term resolution to a conflict that has exacerbated worldwide inflation. The Dow Jones Industrial Average climbed 0.9% to a record, and the Nasdaq composite jumped 3.1%, reflecting hopes that lower oil prices will alleviate pressure on households and businesses.

Companies with significant fuel bills, such as United Airlines (+3.9%) and Royal Caribbean Group (+6.6%), saw immediate gains. Artificial intelligence stocks also rallied, with Micron Technology up 10.8%, Advanced Micro Devices up 7%, and Nvidia climbing 3.5%.

SpaceX, which includes the AI company xAI, debuted on Nasdaq with a 19.6% rise, achieving a US$2.1 trillion valuation. In the bond market, the 10-year Treasury yield slipped to 4.47% from 4.48% on hopes that reduced inflation pressure will deter central banks from raising interest rates.

Traders now assign only a 57% chance of a Fed rate hike this year, down from 71% a week ago, according to CME Group data. Internationally, Japan's Nikkei 225 leaped 5% to a record, and South Korea's Kospi soared 5.2%.

Roku fell 1.9% after Fox Corp. announced its US$22 billion acquisition, while Fox's stock dropped 16.8%.

The deal is tentative, with nuclear program negotiations continuing for 60 days, and full energy industry recovery expected to take months.