WASHINGTON (dpa-AFX) - After moving sharply higher early in the session, stocks continued to turn in a strong performance throughout the trading day on Monday. The major averages all showed significant moves to the upside, with the Dow reaching a new record closing high.
The major averages gave back ground going into the end of the day but still posted strong gains. The Nasdaq surged 795.10 points or 3.1 percent to 26,683.94, the S&P 500 jumped 122.83 points or 1.7 percent to 7,554.29 and the Dow advanced 468.77 points or 0.9 percent to 51,671.03.
The rally on Wall Street came 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 4 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 moved sharply higher along with the price of the precious metal, resulting in a 6.2 percent spike by the NYSE Arca Gold Bugs Index.
Substantial strength was also visible among semiconductor stocks, with the Philadelphia Semiconductor Index soaring by 5.5 percent.
Computer hardware, airline, software and retail stocks also turned in strong performances, while energy stocks bucked the uptrend amid the steep drop by the price of crude oil.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher on Monday. China's Shanghai Composite Index shot up 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 also moved to the upside on the day. The German DAX Index jumped by 1.1 percent and the French CAC 40 Index rose by 0.4 percent, although the U.K.'s FTSE 100 Index has bucked the uptrend and fell by 0.4 percent.
In the bond market, treasuries gave back ground after an early surge but still ended the day higher. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, dipped 1.8 basis points to 4.469 percent after hitting a low of 4.441 percent.
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