US Markets Rise on Iran-US Interim Peace Agreement

US equity markets surged on June 18 following the implementation of an interim peace agreement between the United States and Iran. The three major indices all posted gains as investors responded positively to the lifting of US maritime blockades and the reopening of shipping traffic through the Strait of Hormuz. The Dow Jones Industrial Average closed up 72.15 points at 51,564.70, while the Nasdaq Composite gained 496.28 points to 26,517.93 and the S&P 500 advanced 80 points to 7,500. The semiconductor sector led the rally, with the Philadelphia Semiconductor Index reaching record highs. Individual semiconductor stocks benefited from positive developments, including Intel, which surged 10.6% after President Trump announced the company would receive semiconductor production contracts from Apple.

By sector, information technology rose 2.7%, consumer discretionary increased 1.8%, and communications services gained 1.1%. Energy stocks declined 1.7% while financial and healthcare sectors each fell 0.9%. Among the Dow's 30 components, 14 rose while 16 declined. Caterpillar led gainers with a 3.1% increase, followed by Disney and Nvidia, each up 3.0%. IBM fell 5.1% and Johnson & Johnson dropped 2.5%. The Russell 2000 index of small-cap stocks also rebounded, gaining 61 points to 2,979.

The interim agreement marks a significant shift in Middle East geopolitics, with implications extending to global energy markets. However, analysts note that the agreement remains preliminary, with key issues still to be negotiated, including potential future tolls on Hormuz traffic and unresolved concerns over Iran's nuclear development program. Long-term interest rates declined 0.04% to 4.45%. Japanese equity futures trading overnight showed strength with the Nikkei 225 futures rising 760 points to 72,000, suggesting continued positive momentum heading into Asian trading sessions.