U.S. Stocks Rise amid Expectations of Strait of Hormuz Reopening and Easing Inflation Concerns

SadaNews - U.S. stocks rose after the United States and Iran reached a temporary agreement to reopen the Strait of Hormuz, which led to a drop in oil prices and eased inflation fears ahead of Kevin Warsh's first meeting as Chairman of the Federal Reserve this week.

Shares of "SpaceX" rose by 20%, boosting risk appetite in the markets.

The "Nasdaq 100" index for technology stocks jumped by 3.1%, while the "S&P 500" index rose by 1.7%. The Philadelphia Semiconductor Index (SOX) climbed 5.4% to a record level, with strong gains recorded by semiconductor companies and AI-related firms, as shares of "Micron Technology" rose by 11% and "Sandisk Corp" climbed by 6.5%.

West Texas Intermediate crude fell by 4.2% to around $81 per barrel.

Signing of the Official Agreement Between Washington and Tehran

U.S. and Iranian officials are set to meet in Switzerland on June 19 to formally sign the agreement. The text of the agreement has not yet been published by either party, and it is expected that the most complex points will be left for a later stage.

Lori Calvasina, Head of U.S. Equity Strategy Research at RBC Bank, stated in a note on Monday: "We will closely monitor how views on the Federal Reserve, interest rates, and inflation adjust in the coming weeks" as equity valuations have calmed, but they do not seem very compelling.

In stock news, shares of "Nvidia" rose by 3.5% as the company prepares to raise $25 billion through its first bond offering in five years.

Brandon Pitzuro, Chief Investment Officer at "Guidestone", mentioned: "Capital spending momentum on AI continues," as "Nvidia" leverages market conditions to raise funds.

Shares of "Walmart" fell after China summoned "Sam's Club" over food safety concerns in its traditional and online stores. The stock of "Sentin" also declined following its announcement of early retirement offers for most of its employees to cut expenses after a drop in its health insurance plan subscriptions.

Shares of "Visier" dropped by 11% following the sudden departure of CEO Michael Lyons, who resigned to take the CEO position at "Truist Financial". The stock of "Truist" fell by 6.2%.

In contrast, shares of "Robinhood Markets" rose by 5.3%. Analyst Patrick Mole from "Piper Sandler" pointed to the increased size of the prediction market fueled by the World Cup, writing that the football tournament was "like the Super Bowl, but every day".

Mergers and Acquisitions

In deal news, "Fox" agreed to acquire "Roku" for $160 per share in a cash-and-stock deal that values the video streaming platform at about $22 billion. This deal represents an 11% premium on Roku's closing price on Friday.

"SpaceX" shares surged on its first full trading day following its record-setting $75 billion IPO on Friday. Elon Musk's company was the most purchased stock by individual investors for the second consecutive session, with net purchases expected to exceed $100 million for the second day in a row, according to "Vanda" research.

According to the company, individual investors bought a net amount nearly matching their recent purchases of "SpaceX" shares over the last two sessions compared to their total purchases in the U.S. stock market last week.

Disruption of Access to AI Platforms

In a development that could impact the AI industry, the Trump administration took an unprecedented step by issuing an order to "Anthropic" to disrupt access to the most advanced AI platforms for all foreign nationals. The U.S. government issued the order after discovering a potential breach of the "Fable 5" AI model released by "Anthropic" just days earlier, or bypassing its security measures.

The broader rise in stock prices on Monday followed a rebound in the "S&P 500" index late last week after President Donald Trump indicated the possibility of reaching an agreement with Iran. The benchmark index closed on Friday about 2% lower than its record high earlier in June.

Inflation assessments come at a critical time, as the Federal Reserve and several other central banks are set to make interest rate decisions this week.

Joseph Brusuelas, Chief Economist at "RSM", wrote in a note on Monday: "The Fed Chairman, Warsh, will face a tough credibility test. The supply shock unleashed by the war is still affecting the economy, and building AI infrastructure presents its own challenges in supply chains. In other words, we have not yet reached peak inflation."