US stocks rallied sharply on Monday as the tentative deal to end the US-Israel war on Iran raised hopes for restored stability in global energy markets. The S&P 500 rose 1.7 percent, bringing the benchmark index within striking distance of its all-time high, while the tech-heavy Nasdaq Composite jumped 3.1 percent. The blue-chip Dow Jones Industrial Average climbed 0.9 percent to close at a record high, signalling broad-based confidence in the economic outlook.

Tech Leads the Charge

SpaceX shares surged 19.6 percent following the company’s record IPO on Friday, making it the largest market debut in history and pushing founder Elon Musk’s net worth past the trillion-dollar mark. The rally extended to chip stocks and broader technology names, with analysts at Seaport Research Partners saying the removal of geopolitical risk has tilted investor positioning toward growth. Jay Goldberg, a senior analyst at the Chicago-based firm, told Al Jazeera: “The war is over, it seems, so that side of the argument falls away. Investors are now feeling better about taking on more risk.”

Energy Stocks Pull Back

Brent crude futures fell nearly 5 percent to just above $83 a barrel, the lowest since the conflict began, dragging oil and gas stocks lower. The divergence between tech and energy reflects the market’s recalibration of risk: the war boosted energy prices while depressing tech valuations, and the peace deal reverses both dynamics. New York-listed oil majors including ExxonMobil and Chevron saw declines of 2 to 3 percent on the session, while renewable energy names traded flat as investors weighed the longer-term implications of a post-war energy landscape.

What Comes Next

While the rally was broad-based, analysts caution that the 60-day negotiation period between the US and Iran introduces uncertainty. Global oil inventories remain depleted, and the Strait of Hormuz has yet to fully reopen, with approximately 500 vessels waiting to transit. The Federal Reserve also held its first rate meeting under new Chairman Kevin Warsh this week, keeping rates steady but signalling a possible hike before year’s end as inflation remains elevated at a three-year high. For New York’s financial sector, the peace deal removes one major source of volatility — but the path to normalcy in markets, as in energy, will be measured in months rather than days. Asian markets extended the rally on Tuesday, with Japan’s Nikkei 225 briefly crossing the 70,000 threshold for the first time ever and South Korea’s KOSPI gaining more than 2 percent. The coordinated global rally suggests markets are pricing in a sustained reduction in geopolitical risk, though analysts note that much depends on whether the US-Iran framework holds through its 60-day negotiation window.