WASHINGTON (dpa-AFX) - Stocks have moved sharply higher during trading on Monday, extending the strong upward move seen over the two previous sessions. The major averages have all shown significant moves to the upside, with the Nasdaq and S&P 500 climbing further off last Wednesday's one-month lows.
Currently, the major averages are just off their highs of the session. The Nasdaq is up 655.74 points or 2.5 percent at 26,544.58, the S&P 500 is up 123.03 points or 1.7 percent at 7,554.49 and the Dow is up 645.32 points or 1.3 percent at 51,847.58.
The rally on Wall Street comes following news the U.S. and Iran have reached an agreement to end more than three months of war.
President Donald Trump said in a post on Truth Social that a deal with Iran is 'now complete' and authorized the 'toll free opening' of the Strait or Hormuz and the immediate removal of the U.S. blockade of Iranian ports.
Trump later clarified that the Strait of Hormuz would reopen upon the signing of the deal of Friday for purposes of mine removal.
The agreement reportedly extends the U.S.-Iran ceasefire for 60 days, with the countries set to use that window to negotiate over Iran's nuclear enrichment and the disposal of its highly enriched uranium.
U.S. crude oil futures have plunged by more than 5 percent in reaction to the news, easing concerns about the outlook for inflation.
'Prior to the deal, investors had become increasingly concerned that higher energy costs would feed into broader inflation pressures and potentially force policymakers into additional tightening,' said Daniela Hathorn, Senior Market Analyst at Capital.com.
'The sharp decline in oil prices does not eliminate inflation risks altogether, but it does reduce some of the urgency surrounding them,' she added. 'That is particularly relevant this week as the Federal Reserve meets for the first time under new Chair Kevin Warsh.'
In U.S. economic news, a report released by the Federal Reserve showed a modest increase in industrial production in the U.S. in the month of May.
The Fed said industrial production crept up by 0.1 percent in May after climbing by an upwardly revised 0.9 percent in April.
Economists had expected industrial production to rise by 0.2 percent compared to the 0.7 percent increase originally reported for the previous month.
Sector News
Gold stocks have moved sharply higher along with the price of the precious metal, resulting in a 7.3 percent spike by the NYSE Arca Gold Bugs Index.
The steep drop by the price of crude oil has also contributed to substantial strength among airline stocks, with the NYSE Arca Airline Index soaring by 4.3 percent.
Semiconductor stocks are also seeing significant strength on the day, driving the Philadelphia Semiconductor Index up by 4.2 percent.
Computer hardware, software and brokerage stocks are also turning in strong performances, while energy stocks are bucking the uptrend.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher on Monday. China's Shanghai Composite Index jumped by 1.6 percent, Japan's Nikkei 225 Index spiked by 5 percent and South Korea's Kospi soared by 5.2 percent.
Most European stocks have also moved to the upside on the day. The German DAX Index is up by 1.3 percent and the French CAC 40 Index is up by 0.7 percent, although the U.K.'s FTSE 100 Index has bucked the uptrend and dipped by 0.3 percent.
In the bond market, treasuries have moved higher in reaction to the news of the potential U.S.-Iran deal. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 3.8 basis points at 4.449 percent.
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