Global equity markets are flashing bright green as the trading week opens Monday, after the US and Iran confirmed a formal ceasefire agreement Sunday, ending more than 100 days of hostilities and reopening the Strait of Hormuz. Oil is tumbling more than 4% while stocks from Tokyo to New York climb.

S&P 500 futures are up roughly 1.2%, the Dow Jones Industrial Average is adding 1%, and the Nasdaq 100 is surging 1.9% led by tech. Risk appetite has broadly returned as the defining geopolitical overhang of 2026 is removed.

The Deal — What Happened Over the Weekend

President Donald Trump announced on Truth Social Sunday: "The Deal with the Islamic Republic of Iran is now complete." He authorized the immediate lifting of the US naval blockade on Iran and the reopening of the Strait of Hormuz, writing: "Ships of the World, start your engines. Let the oil flow!"

Pakistani Prime Minister Shehbaz Sharif, who mediated the talks, confirmed the agreement and said a formal signing ceremony will take place Friday, June 19, in Geneva, Switzerland. Iran's deputy foreign minister confirmed the MOU text has been finalized. The deal includes an immediate cessation of hostilities, withdrawal from Lebanon, and a framework for a broader accord over the next 60 days.

The Sector Winners and Losers

Oil is crashing. Brent crude is down more than 4% in early trading, retreating sharply from the highs above $110 hit during months of conflict. The reopening of the Hormuz waterway eliminates one of the biggest supply-risk premiums that had been priced into energy markets.

Sector implications are playing out fast:

• Airlines: Among the biggest beneficiaries. Lower jet fuel costs directly boost margins. United, American, Delta, and Southwest are all seeing pre-market strength.
• Energy: The flip side — Exxon Mobil, Chevron, and ConocoPhillips are edging lower on the oil slide. Lower crude compresses upstream margins.
• Defense: Under pressure after a prolonged rally during the conflict. De-escalation typically dampens demand expectations for defense spending.
• Gold: Rising 2.5-2.6%, drawing safe-haven flows as the dollar weakens and geopolitical volatility creates a bid for the metal.

This Week: The Fed Takes Center Stage

Beyond the Middle East news, the week is packed:

• Data today: The Empire State Manufacturing Index (8:30 AM ET), May's reading hit 19.6 — a four-year high. Consensus for June is around 13.2. At 9:15 AM ET, Industrial Production for May is due, with +0.2% month-over-month expected.
• FOMC decision: The Federal Reserve meets Tuesday-Wednesday (June 16-17). Markets are pricing a 96-99% probability of no change, keeping rates at 3.50%-3.75%. Everyone will watch the updated dot plot and economic projections for signals on the path ahead.

Rate-cut expectations have faded dramatically this year. The consensus has shifted to "higher for longer" as inflation remains sticky, the labor market stays resilient, and the geopolitical shock wave from the Iran conflict — now unwinding — added another layer of uncertainty.

Markets at a Glance

Asia opened sharply higher: Japan's Nikkei 225 surged 5.5%, South Korea's Kospi jumped 5.7%, Taiwan's Taiex gained 2.7%, and Australia's ASX 200 rose 1.5%. European indices are up 1-2%.

Key US futures levels:

• Dow: ~52,131 (+1.1%)
• S&P 500: ~7,527 (+1.2%)
• Nasdaq 100: ~30,200+ (+1.9%)

The Bottom Line

The US-Iran peace deal is the defining event of the week, and markets are celebrating the removal of a major geopolitical risk factor. But open questions remain — implementation details, Iran's nuclear program, and whether oil prices can sustain lower levels given pre-conflict dynamics. For now, investors are breathing a sigh of relief, but attention shifts rapidly to the Fed and the interest rate path as the week progresses.