Stocks rise after US, Iran sign peace plan
Complete. Here is the key summaryUS and Iranian stocks rose following a peace memorandum signed by Presidents Trump and Pezeshkian, signaling an end to the war that spiked energy prices. The deal lifts the naval blockade and resumes Strait of Hormuz traffic. Consequently, Brent Crude fell to ~$76/barrel, oil giants like Shell and Chevron dropped, and US gas prices fell below $4. S&P 500 and Nasdaq futures rose, while momentum ETFs gained as inflation concerns eased.
Stocks rose Thursday morning after President Trump and Iranian President Masoud Pezeshkian signed a memorandum of understanding aimed at ending the war, in another sign that a months-long war that caused energy prices to spike could be coming to an end.
Trump signed the MOU before a dinner in Versailles, France on Wednesday evening. The president previously announced that a deal had been reached on Sunday evening, saying that traffic through the Strait of Hormuz would resume and that the US naval blockade would be lifted.
The deal comes after both sides exchanged attacks last week, escalating tensions to some of the highest levels since the US and Israel struck Iran in late February.
The price of Brent Crude ticked even lower after dropping on Sunday, sitting at about $76 a barrel. Oil giants like Shell, Chevron and Exxon fell on the news, as average gas prices in the US dropped below $4 for the first time in months.
Futures for the S&P 500 and Nasdaq Composite rose 0.9% and 1.5%, respectively. Last week, inflation readings for May showed both wholesale inflation and consumer prices rose in large part because of higher energy costs.
Signs of the peace deal have also lead to buying of momentum stocks this week. iShares MSCI USA Momentum Factor ETFrose another 1.46% in premarket trading.