Market Optimism Surges as Strait of Hormuz Agreement Boosts Stocks

Wall Street indexes rose following a preliminary agreement between Washington and Tehran to end their conflict, easing crude prices. Airline and cruise stocks gained, while oil majors saw a decline. Traders adjust Federal Reserve interest rate expectations amid reduced inflationary pressures and upcoming IPO activity.

Wall Street's main indexes were poised for a strong open on Monday, spurred by news that Washington and Tehran have reached a preliminary agreement to end hostilities and reopen the vital Strait of Hormuz.

The move sent crude prices tumbling to their lowest levels since March, bolstering airline and cruise stocks while exerting downward pressure on energy shares. United Airlines rose by 4.5% and Delta Air Lines by 4%, while Exxon Mobil and Chevron fell by 3% each. The market outlook improved further with expectations that the Federal Reserve might pause its rate hikes, considering easing inflationary pressures.

Meanwhile, SpaceX shares climbed after a successful IPO, and chip stocks rallied as well. Fox tumbled 13.1% following its announcement of a $22 billion deal to acquire Roku. The CBOE Volatility Index, a key measure of market fear, also showed signs of calming.