Dow futures rise following the announcement of an interim peace agreement between the U.S. and Iran. While certain aspects of the agreement are still ambiguous, President Donald Trump has indicated that the Strait of Hormuz will be elevated later this week. Oil prices experienced a decline, whereas gold saw an increase and the dollar weakened. Investors are also trying to evaluate the potential effects of a deal on the upcoming Federal Reserve interest rate decision.

Dow futures on Wall Street indicated an upward trend on Monday, following the announcement of an interim peace agreement between the United States and Iran that has the potential to conclude a war lasting over three months, which has significantly impacted the global economy. By 03:03, the Dow futures contract had risen by 492 points, or 1.0%, S&P 500 futures had climbed by 89 points, or 1.2%, and Nasdaq 100 futures had increased by 590 points, or 1.9%. “The fizz in staying in markets this morning as after 107 days and a seemingly endless number of false dawns, we finally have a deal between the U.S. and Iran to end the war and open the Strait of Hormuz,” analysts noted. The primary indices experienced an uptick to conclude the previous week, supported by optimism surrounding a potential agreement between Washington and Tehran, alongside a surge in SpaceX shares following their record-setting public debut. Even as some experts highlighted concerns regarding SpaceX’s fundamentals, the stock surged past its IPO price of $135 a share, assigning Elon Musk’s reusable rocket company a valuation exceeding $2 trillion and positioning it among the largest publicly listed firms in the U.S. Other space-industry names, such as Rocket Lab and Planet Labs, experienced an uptick following the flotation.

The evident resolution to the Iran conflict, along with the ensuing response across various assets, garnered significant focus as the new trading week commences. Both the U.S. and Iran have announced that a peace deal has been reached, with the agreement set to be signed in Switzerland on Friday. Neither side provided a comprehensive outline of the specifics of the agreement, as reported. Media reports indicate that the agreement could include a 60-day timeframe intended for discussions regarding Iran’s nuclear program. President Trump, committed to eliminating Iran’s nuclear aspirations, also conveyed to the WSJ that any agreement would entail Iran’s commitment to refrain from acquiring nuclear weapons. However, Trump did not address this in his social media posts on Sunday. Shehbaz Sharif, the prime minister of Pakistan, which has served as a mediator throughout the conflict, stated that the two nations have “declared the immediate and permanent termination of military operations on all fronts. That includes Lebanon,” Sharif stated. Concerns had emerged regarding the outlook for the deal following U.S.-allied Israel’s attacks on Iran-backed Hezbollah militia in Lebanon over the weekend, which prompted a strong rebuke of Israeli Prime Minister Benjamin Netanyahu by Trump.

Trump notably indicated in a social media post that the Strait of Hormuz would be reopened on Friday, attributing the delay to mine-clearing operations in the narrow waterway off Iran’s southern coast. The potential return of flows through the strait, which has significantly impacted global energy supplies, has triggered a fresh decline in oil prices that have remained elevated compared to pre-war levels for several weeks. By 08:28, Brent crude futures, the global oil benchmark, had decreased by 5.1% to $82.84 a barrel.U.S. West Texas Intermediate crude futures experienced a decline of 5.8%, settling at $79.93 per barrel. Trump has indicated that the enduring American naval blockade of Iranian ports may be lifted concurrently with the removal of Iran’s restrictions on the Strait of Hormuz. This could restart shipping in a crucial channel through which, prior to the onset of the conflict in late February, approximately one-fifth of the global oil and liquefied natural gas flowed. Some analysts remain sceptical that, even with a deal in the Middle East, oil prices will return to previous levels. They point to inherent geopolitical risk premiums and the time required for supply chains to recover. Financial markets are once again invigorated by the prospect of a potential peace agreement in the Middle East and the likelihood of renewed energy exports from the Gulf. “Whether that delivers much lower energy prices is highly questionable,” analysts said in a note.

Meanwhile, gold experienced a significant increase, with spot prices for the yellow metal rising by 2.3% to $4,315.44 an ounce. This marks the highest level since June 9 and extends a streak of gains to a third consecutive session. Gold futures experienced an increase of 2.3%, reaching $4,336.17 per ounce. Partly supporting bullion was a decline in the U.S. dollar, which reached a 10-day low against its major counterparts. The greenback has been perceived as a relatively safe-haven asset amid the war, making it susceptible to an increase in risk sentiment in the wake of a peace agreement. A softer dollar can enhance gold’s appeal by making it more affordable for international purchasers. Simultaneously, the decline in oil prices may alleviate concerns regarding a potential hawkish policy shift by global central banks, which has been triggered by an inflation surge linked to energy costs. Non-yielding gold typically shows weaker performance in high interest rate conditions.

A crucial inquiry at this juncture centers on the potential influence of the peace agreement on the Federal Reserve’s forthcoming policy decision scheduled for Wednesday. Bets have increased that the Fed will maintain rates this week and may consider raising borrowing costs later in 2026. At the start of the year, expectations for the Fed to implement rate cuts in 2026 have significantly diminished, particularly following recent data indicating a rise in inflation. “[I]t’s still very likely that the easing bias will be removed from the FOMC statement,” experts noted in a report, referencing the rate-setting Federal Open Market Committee. However, they contended that new Fed Chair Kevin Warsh, who finds himself navigating the tension between accelerating price growth and Trump’s demand for substantial rate cuts, “could influence the outcome during the [post-decision] press conference and lean towards a dovish stance by emphasising” that several Fed members have suggested rate reductions would be appropriate if the Iran conflict is resolved in the near term.