Stocks Rally as US-Iran Peace Deal Eases Inflation Concerns – US Market Wrap
Wall Street staged a broad rebound, with stocks and bonds advancing as a peace agreement between the US and Iran boosted confidence that the reopening of the Strait of Hormuz will help ease energy pressures and reduce inflation risks.
The S&P 500 climbed 1.1%, while a semiconductor index reached a record high. Intel surged after President Donald Trump said the company will partner with Apple to design and manufacture semiconductors in the US. Treasury yields declined after their recent rise on concerns the Federal Reserve might need to tighten policy further. Oil prices edged lower.
With the interim peace agreement now in effect, shipping activity began returning to the Strait of Hormuz as the US ended its blockade and negotiations over Iran’s nuclear program entered a new phase. The restoration of traffic through one of the world’s most important energy corridors helped calm fears of a prolonged supply shock.
US officials also sought to reassure markets that future disruptions to Hormuz are unlikely. During the conflict, restrictions on shipping through the strait drove fuel prices sharply higher and raised concerns about broader economic fallout. As those risks recede, investors have become more optimistic about the outlook for growth, inflation, and corporate earnings.
