Investors are breathing a sigh of relief this week as U.S. stock markets posted massive gains. The key news was a huge geopolitical development. The United States and Iran sign a peace agreement to reopen the Strait of Hormuz, a key shipping route for global oil.

This historic announcement triggered a powerful relief rally on Monday, sending the Nasdaq Composite up by 2.2%.

Markets Surge as Geopolitical Tensions Ease

Wall Street’s positive momentum extended across the board, as all the major indices advanced. Although the tech-heavy Nasdaq has been leading the way, the S&P 500 gained 1.3%. The Dow Jones Industrial Average also was 1% higher, continuing robust gains from Friday.

For months, conflict in the Middle East has weighed heavily on global markets. Despite periodic record highs, analysts say stock markets remain constrained by concerns about the duration and implications of this conflict. Today, due to a ceasefire some investor confidence is coming back by leaps and bounds.

Oil Prices Plunge Amid Ceasefire News

Immediate reopening of the Strait of Hormuz resolved concerns about a world energy crisis. During the peak of the tensions, oil shipments were disrupted, sending prices well over $100 per barrel.

The price of crude fell following the peace agreement. WTI traded down 5.6% to $80 per barrel. Brent crude also was hit with a deep drop, dipping 3.21% to $89.93 a barrel.

Big Movers: Roku, Fox, and SpaceX

There was considerable individual stock movement and a general market rally.

• Roku (ROKU): The biggest gain Friday was by the streaming company, which jumped 20 percent and has extended its run up through Monday morning. The jump coincided with Fox revealing a planned acquisition worth $22 billion for the company. Meanwhile, Fox (FOX) closed 13% in premarket trading.
• SpaceX (SPCX): The much awaited SpaceX IPO hit the market Friday. The stock rallied nearly 6% in Monday’s pre-market session to provide much momentum to the space and tech industries.

What Investors Should Watch Next

The market appears to be transitioning from fear to optimism, but it’s going to be a challenging week. The Federal Reserve is scheduled to meet on Wednesday, but experts aren’t expecting any rate changes. 

Additionally, the stock market will close this Friday in observance of the Juneteenth holiday, making it a shortened trading week. These are events that investors should follow closely, since the market is on a new bullish momentum.