Major US stock indices closed higher on Monday, with the Nasdaq Composite gaining more than 2%, following a weekend agreement between the United States and Iran to pause hostilities and allow commercial vessels free passage through the Strait of Hormuz.
This development came after military exchanges the previous weekend had threatened to derail negotiations aimed at ending the conflict. A US official stated that technical talks on all areas of a memorandum of understanding would continue as planned, with both sides currently exercising restraint, allowing ships to pass freely.
US Markets
The Dow Jones Industrial Average rose 306.33 points, or 0.59%, to close at 52,182.44. The Nasdaq Composite advanced 522.53 points, or 2.07%, to 25,820.14. The S&P 500 index gained 86.36 points, or 1.18%, finishing at 7,440.38.
Western Digital (WDC.US) shares jumped 11%. Strategy (MSTR.US) surged 12.6%. Seagate Technology (STX.US) rose over 7%. SpaceX (SPCX.US) gained 7%. Micron Technology (MU.US) and NVIDIA (NVDA.US) each added 1%. The Nasdaq Golden Dragon China Index closed up 1.4%, with Baidu (BIDU.US) climbing more than 7%.
European Markets
Germany's DAX 30 index fell 55.03 points, or 0.22%, to 24,626.69. The UK's FTSE 100 index declined 15.60 points, or 0.15%, to 10,492.42. France's CAC 40 index dropped 17.54 points, or 0.21%, to 8,367.33. The Euro Stoxx 50 index gained 9.10 points, or 0.15%, to 6,230.65. Spain's IBEX 35 index decreased 41.02 points, or 0.21%, to 19,384.28. Italy's FTSE MIB index lost 79.85 points, or 0.16%, to 51,185.50.
Asian Markets
Japan's Nikkei 225 index rose 0.15%, while South Korea's KOSPI index fell 0.2%.
Currencies and Cryptocurrencies
The Bloomberg Dollar Spot Index declined 0.1% after rising 0.5% last week. The yen weakened to its lowest level against the US dollar since 1986, sparking speculation that Japanese authorities might intervene to support the currency. The US dollar index retreated. Citi macro strategists closed their long-yen recommendation from May, citing a lack of "clear signals" from Japan's Ministry of Finance regarding potential intervention to support the weak yen.
Bitcoin rose over 2% to $60,331 at the time of writing. Ethereum gained over 3.8% to $1,617.98.
Commodities
Oil prices rose at the start of the week as traders assessed whether the ceasefire would hold and alleviate concerns about energy supply disruptions. International benchmark Brent crude rose 1.2% to $72.87 per barrel, while West Texas Intermediate futures climbed 1.7% to $70.38.
Adam Crisafulli of Vital Knowledge noted that neither side appears willing to resume full-scale hostilities, and the overall process may still be moving toward sustained de-escalation.
Spot gold fell 1.75% to $4,016.45. Spot silver edged higher to $58.293.
Key Developments
Iran's Deputy Foreign Minister emphasized that all vessels must pass through the Strait of Hormuz via the "Iranian route," or Iran will take countermeasures. He stated that Iran is willing to discuss a "new arrangement" for the strait with Oman but opposes any route other than the "Iranian route."
US strategic petroleum reserve crude stocks fell by 5.5 million barrels to 325.7 million barrels, the lowest level since May 1983. This drawdown is part of a US agreement to release 172 million barrels from the reserve to fill global inventory gaps after the Iran conflict and help lower fuel prices. Total US oil inventories, including commercial stocks and the SPR, have fallen by 111.4 million barrels since the conflict began in late February, reaching 743.3 million barrels, the lowest since 1984.
Bank of America's technical research head, Paul Ciana, warned that investors should hedge against further gains in the S&P 500 and prepare for a potential "three-wave correction" in the coming months. He noted the index has risen nearly 17% from its March low but momentum has weakened since its recent peak on June 2, and it could potentially fall to around 6,850 points, about 7.6% below current levels.
Federal Reserve Governor Cook expressed relief at the Supreme Court's decision, stating it reaffirms the principle that the Fed must make policy decisions based on evidence and independent judgment, free from political interference. She vowed to continue defending the principle of political independence while serving at the Fed.
Company News
SpaceX (SPCX.US) helped drive total US stock issuance to a new record in the first half of the year, alongside record issuance activity from Google parent Alphabet (GOOG.US, GOOGL.US). Data shows US IPO and stock issuance volume reached a record $251 billion (excluding blank-check companies) through June 26, surpassing the previous half-year record set during the 2021 boom. More deals are in the pipeline, including ongoing IPOs and a potential mega-funding round for AI startup Anthropic PBC as early as October.
Strategy (MSTR.US) announced a comprehensive overhaul of its bitcoin strategy, financing model, and treasury structure. Under increasing pressure, the company has granted itself broader authority to sell the cryptocurrency, repurchase securities, and maintain liquidity for adaptation. The firm stated it may sell up to $1.25 billion worth of bitcoin to bolster its cash reserves and established separate repurchase programs of up to $1 billion each for its common and preferred stock. Strategy also indicated it will become more disciplined in issuing common stock, particularly when its share price is at or near the value of its bitcoin holdings.
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