US sharemarkets surged on Monday after President Donald Trump announced that an agreement had been reached to end the Iran war, boosting investor confidence and driving all three major indices higher.
The Dow Jones Industrial Average rose 468.77 points, or 0.92%, to a record close of 51,671.03 after also reaching a new intraday high. The S&P 500 gained 1.65% to finish at 7,554.29, while the Nasdaq Composite jumped 3.07% to 26,683.94, recording its strongest session since March 31.
Technology stocks led the advance, supported by continued enthusiasm surrounding SpaceX. Shares in Elon Musk’s rocket company climbed almost 20%, extending gains after surging 19% in their market debut on Friday.
Investors welcomed confirmation that a memorandum of understanding between the United States and Iran had been completed, with a formal signing expected in Switzerland later this week. According to Pakistani Prime Minister Shehbaz Sharif, the agreement has already been signed electronically.
The deal eased concerns about further escalation in the Middle East and reduced fears of prolonged disruptions to global energy markets.
Australian Market Outlook
Australian shares are expected to open lower despite the strong lead from Wall Street, with futures pointing to a pullback following the local market’s recent gains.
S&P/ASX 200 futures are down 110 points, or 1.2%, to 8,815.
The divergence between local futures and US equities suggests investors may be taking profits after the Australian market’s recent rally, while continuing to assess the implications of the US-Iran agreement.
Energy stocks are likely to remain in focus after the sharp fall in oil prices, while commodity and resource sectors may respond to ongoing moves across global energy and metals markets.
Investors will also continue monitoring developments surrounding the reopening of the Strait of Hormuz, with further clarity on shipping activity expected to influence commodity markets and broader risk sentiment in the days ahead.
The Reserve Bank’s monetary board will announce its rate decision from the June meeting at 2.30pm AEST. The bank is expected to keep the cash rate on hold.
