Global equity markets advanced sharply Monday as oil prices declined following a tentative agreement between the United States and Iran to extend a ceasefire and reopen the Strait of Hormuz, a vital corridor for global crude oil shipments. The deal, announced Sunday, has raised hopes for a sustained easing of geopolitical tensions that have contributed to inflationary pressures worldwide.

In the United States, the S&P 500 climbed 1.7%, buoyed by optimism that the agreement could represent a longer-term resolution to the conflict. The Dow Jones Industrial Average gained 673 points, or 1.2%, while the Nasdaq Composite rallied 2.7% by late morning trading. Oil prices fell sharply in response, with Brent crude dropping 4.7% to $83.25 per barrel—levels not seen since early March. Although still above pre-conflict prices of around $70 per barrel, the decline from recent highs above $100 is expected to ease costs for consumers and businesses, which have faced elevated prices for fuel, food, and fertilizer amid the ongoing war.

Iran confirmed the deal but indicated that formal implementation will not begin until the accord is signed, a process anticipated to occur on Friday in Switzerland, according to Pakistani officials involved in the mediation. Broader negotiations concerning Iran’s nuclear program are slated to continue over the next two months, leaving room for potential setbacks. Energy analysts also cautioned that restoring full throughput through the Strait of Hormuz could take several months as infrastructure and supply chains adjust.

The impact of the tentative ceasefire reverberated across various sectors. Airlines and travel-related companies benefitted immediately, with United Airlines shares rising 5.2%, American Airlines up 3.5%, and Carnival Corporation advancing 4.2%. Artificial intelligence (AI) stocks, which have experienced significant volatility in recent weeks, also gained momentum. Semiconductor manufacturers Micron Technology and Advanced Micro Devices surged 9.4% and 7.5%, respectively, while Nvidia added 3%, providing substantial support to the broader market given its status as the most valuable U.S. tech company.

SpaceX, the aerospace and AI firm led by Elon Musk, saw its shares increase 7.9% in its second day of trading on Nasdaq, reflecting strong investor interest in AI-driven companies. The market capitalization of SpaceX is estimated at over $2.1 trillion, surpassing that of Exxon Mobil, Bank of America, and Coca-Cola combined.

In bond markets, U.S. Treasury yields eased, with the 10-year yield declining to 4.45% from 4.48%, as hopes grew that lower oil prices could reduce inflationary pressures and lessen the likelihood of interest rate hikes by central banks. Last week, the European Central Bank became the first major central bank to raise rates amid persistent inflation. The Federal Reserve is scheduled to announce its rate decision later this week, the first under new chair Kevin Warsh, a Trump nominee. Market participants largely expect the Fed to maintain current rates, with the probability of a rate increase this year dropping to 56% from 71% a week earlier, reflecting the easing tensions.

Elsewhere, Roku’s stock dipped 0.6% after the company announced its acquisition by Fox Corp. in a cash-and-stock deal valued at approximately $22 billion. Roku's shares had surged 20% the previous Friday on initial reports of the transaction. The deal aims to give Fox access to Roku’s channel, first-party data, and its worldwide streaming audience exceeding 100 million households. Fox’s stock declined 16.1%.

International markets also responded positively. Japan’s Nikkei 225 soared 5%, marking one of the largest daily gains and closing at a record high, driven by increased foreign investor buying amid expectations of reduced Middle East tensions. South Korea’s Kospi index rose 5.2%, supported in part by continued rallies in AI sector leaders such as Samsung Electronics. European indexes similarly posted gains, reflecting broad investor relief on the unfolding diplomatic progress.