Nasdaq up 2.2% after Strait of Hormuz Opens
The Nasdaq and S&P 500 benefitted from a tech rally and the opening of the Strait of Hormuz this week.
Quick overview
- The Nasdaq Composite surged 2.2% following a U.S.-Iran peace deal to reopen the Strait of Hormuz.
- All major U.S. stock indices experienced gains, with the Dow up 1% and the S&P 500 rising 1.3%.
- Oil prices dropped significantly, with West Texas Intermediate falling to $80 per barrel amid the ceasefire.
- The stock market is expected to maintain bullish momentum this week, despite lingering investor fears.
On Monday, the Nasdaq Composite shot up 2.2% after news broke that the United States and Iran had reached a deal to reopen the Strait of Hormuz.
All three major United States stock indices jumped Monday morning while oil prices sank following news of a U.S.-Iran peace deal. The Dow was up 1% thanks in part to continued momentum from Friday’s strong market performance, and the S&P 500 added 1.3% and the Nasdaq 2.2% as the tech rally continued.
For now, conflict between Iran and the United States is over and a ceasefire has been reached. The back and forth these two countries have had since February indicates that the peace may be a tenuous one. The stock market is bullish, however, and we anticipate solid gains for the markets this week.
Ceasefire Propels Market Forward
Fighting between Iran, Israel, Lebanon, and the United States for the past few months has held back stock market growth. Even though the leading stock indices reached record highs in that period, analysts believe that the market could have climbed much higher if investors were not worried about the outcome and length of the Iran conflict.
For several months, Iran and the United States in particular fought over the Strait of Hormuz, a key shipping lane in the Middle East. Their fighting hindered shipments of oil in the region and around the world, creating an oil crisis. Oil benchmark prices rose well above $100 per barrel during the peak of the crisis, and stock market futures dipped on investor fears.
West Texas Intermediate dropped 5.6% Monday down to $80 per barrel, and Brent crude fell to $89.93 per barrel after a drop of 3.21% for the day. The stock market Fear & Greed Index is still in Fear territory but is very likely to climb closer to Greed throughout the week.
Roku (ROKU) stock is one of the big movers recently, and the streaming company saw gains of 20% Friday and a further increase Monday morning. Fox announced it would buy the company for $22 billion, and Fox (FOX) was down 13% in premarket trading.
The stock market may be most excited by the launch of the SpaceX IPO (SPCX), which made its entrance to the stock market on Friday. The stock climbed nearly 6% on Monday in the premarket and is set to produce tremendous market momentum for related stocks this week.
Investors need to know that the stock market will close Friday for the Juneteenth holiday, creating an extended holiday weekend. Ahead of that closure, the Federal Reserve will be holding a policy meeting Wednesday, with the odds favoring no change in interest rates.
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