HOUSTON: Wall Street’s main indexes rose on Monday, with the Dow touching an intraday high after the United States and Iran struck a preliminary agreement to end the Middle East war and reopen the Strait of Hormuz, leading to a sharp fall in crude prices.
The dealframework, however, did not address key issues such as Tehran’s nuclear program and the Israel-Lebanon conflict. The pact is expected to be formally signed in Switzerland on Friday. Crude prices plummeted 5 percent following the news and hit their lowest level since March, aiding shares of energy-sensitive airline and cruise stocks and hurting energy shares.
United Airlines rose 5.4 percent, while Delta Air Lines and American Airlines added 2.2 percent and 4.4 percent, respectively. Norwegian Cruise and Carnival Corp advanced about 4 percent each.
Shares of oil majors Exxon Mobil and Chevron fell almost 4 percenteach. The S&P 500 energy index was down 3.4 percent.
The CBOE Volatility Index, Wall Street’s fear gauge, slipped to a more than one-week low at 16.35 points. It had risen to a more than two-month high the previous week. The three main indexes were on track for a third consecutive session of gains, recovering after geopolitical tensions and a pullback in AI-related stocks halted Wall Street’s record climb.
“For markets, the Strait is the only thing that matters because its blockage was most pernicious for the global economy,” said Thierry Wizman, global forex and rates strategist at Macquarie Group.