U.S. stock market exchanges closed Friday for the Juneteenth holiday after finishing the prior day on a strong note, driven by optimism over the U.S.-Iran peace deal signed earlier in the week.
On Thursday, June 18, the Nasdaq composite rose 1.9%, reversing a decline from the previous day, according to the Wall Street Journal. The S&P 500 and Dow industrials also gained, with the Nasdaq posting a 2.4% weekly gain and the other major indexes rising nearly 1% for the week.
The stock market rally came as the United States and Iran signed a memorandum of understanding on June 17-18 to extend their ceasefire for 60 days and begin negotiations toward a permanent peace deal. The agreement commits both sides to end military operations on all fronts, including in Lebanon, and includes the reopening of the Strait of Hormuz and the lifting of the U.S. naval blockade, according to reports from Reuters, Al Jazeera, and the BBC.
Oil prices fell sharply following the deal announcement. Brent crude dropped 2.3 percent on Thursday in Asia, returning near its level from 24 hours earlier, according to Al Jazeera. For the week, Brent futures were about 9 percent lower, trading just a few dollars above their prewar levels.
The decline in oil prices brought relief to consumers at the pump. The average cost of a gallon of gasoline slipped below $4 for the first time in more than two months, according to data from AAA cited by the Wall Street Journal. The blockage of the Strait of Hormuz had resulted in an estimated daily shortfall of 14 million barrels in the global oil market, according to the International Energy Agency.
Investors also responded to the Iran deal by rotating into semiconductor and technology stocks. Despite concerns about higher interest rates following a stronger-than-expected Federal Reserve pivot toward raising rates on Wednesday, traders piled into chip makers and other companies tied to artificial intelligence buildouts, the Journal reported.
With U.S. cash markets closed for Juneteenth on Friday, stock trading resumed Monday. The market had posted its best week since the end of May, with broad relief over the tentative peace agreement offsetting rate-hike concerns that had rattled investors earlier in the week.
Sources
- Wall Street Journal — stock market performance on June 18, gasoline prices, weekly gains for major indexes
- Al Jazeera — oil price movement following Iran deal, Brent crude decline, Asian market rallies
- Reuters — U.S. stock index rallies, Iran peace agreement details
- BBC — U.S.-Iran agreement terms including Strait of Hormuz reopening
- NYSE — Juneteenth holiday market closure
- Yahoo Finance — stock market holiday schedule
