Dow Hits Record on Iran Deal Optimism as Oil Slides

Stock markets climbed to fresh highs Monday after President Donald Trump announced a U.S.-Iran memorandum of understanding aimed at extending a ceasefire and easing Middle East tensions. The Dow Jones Industrial Average rose 468.77 points, or 0.92 percent, to close at both an intraday and session record. The S&P 500 gained more than 1 percent and the Nasdaq Composite advanced 3.1 percent.

Tuesday brought a more measured tone. Futures on the Dow edged up 0.1 percent while the S&P 500 held near flat and the Nasdaq 100 rose 0.2 percent. Investors weighed the absence of full agreement text and questions over how quickly the Strait of Hormuz would return to normal traffic. Brent crude fell 2.7 percent to $80.91 a barrel, its lowest level in three months, while West Texas Intermediate dropped 2.8 percent below $80.

Trump stated the provisional deal, signed electronically on Sunday, would reopen the Strait of Hormuz to all shipping on Friday without Iranian tolls. Vice President JD Vance told CNBC the passage would remain toll-free for the long term. Pakistani Prime Minister Shehbaz Sharif confirmed that military operations had ended on all fronts, with a formal signing ceremony scheduled for Friday in Switzerland. Washington and Tehran have offered differing public descriptions of the memorandum’s contents.

G7 leaders meeting in Évian-les-Bains, France, were expected to discuss further details later in the week. Shipping executives expressed caution. Hapag-Lloyd welcomed the prospect of resumed transit for its remaining vessels. Mitsui OSK Lines chief executive Jotaro Tamura told the Financial Times that operators would likely wait weeks until concrete conditions on the ground allow safe passage; the strait had carried about 20 percent of global oil supply before the conflict began in late February.

Regional markets showed mixed results. Japan’s Nikkei 225 touched an intraday record before finishing 0.13 percent higher. South Korea’s Kospi rose 2.11 percent. Hong Kong’s Hang Seng fell 1.64 percent. European shares opened modestly higher, led by industrial and banking stocks.

Central banks also drew attention. The Bank of Japan raised its policy rate to 1 percent, the highest since 1995. Australia’s central bank left rates unchanged at 4.35 percent. The Federal Reserve, Bank of England and Swiss National Bank were scheduled to announce decisions later in the week, with no immediate moves anticipated.