An agreement has been reached between America and Iran to end the war and reopen the Hormuz Route. After this news, a huge rise is being seen in the stock markets around the world on Monday and the prices of crude oil have fallen. Investors hope that this agreement will end the long-running tension, which had greatly increased inflation across the world. Brent crude came at $ 83.18, as soon as the news of relief agreement to oil companies came, the price of Brent crude oil in the international market fell by 4.8% to $ 83.18 per barrel. This price is equal to the level of the beginning of March. However, this is higher than the price of $70 before the war started three months ago. However, it is much lower than the level of $ 100 per barrel a few weeks ago. Oil becoming cheaper will provide great relief to those families and businesses who were paying expensive prices for fuel, food and fertilizers. Signing will take place in Switzerland, talks will last for 60 days. Iran has confirmed this agreement, but has also said that it will not be implemented until it is signed. According to Pakistan, this deal will be signed in Switzerland on Friday. Talks are expected to continue for the next 60 days on major issues such as Iran’s nuclear program. However, due to this long period, there is a possibility of some obstacles in the agreement. Experts say that even if the Hormuz Route opens, it will take months for the energy industry to return to full speed. American markets jumped on Wall Street, Dow Jones rose 638 points. The direct effect of this relief in the global market was visible on the American stock market Wall Street. In early trading on Monday, the Dow Jones Industrial Average was trading with a gain of about 650 points. With this, the SP 500 index rose 1.5% and the Nasdaq Composite rose 2.3%. Companies with fuel expenses benefited, shares of airlines rose 7%. The news of fall in fuel prices led to an immediate rise in the shares of those companies whose fuel bills are very high. United Airlines shares climbed 5.2%, while American Airlines gained 7%. Apart from this, shares of cruise operator company Carnival also strengthened by 5.7%. Strong rise in shares of AI companies, Micron jumped 7.8%. A tremendous rise has also been seen in the shares of companies related to Artificial Intelligence (AI) industry. Shares of AI companies have been going through a lot of volatility in recent weeks as there were concerns in the market that they had gone up too fast due to the AI craze. On Monday, shares of Micron Technology rose 7.8% and shares of Advanced Micro Devices (AMD) rose 7%. Shares of Nvidia, Wall Street’s most valuable company, registered a rise of 2.7%, which played the biggest role in pulling the SP 500 up. Value of Elon Musk’s SpaceX crosses $2.1 trillion Elon Musk’s rocket company SpaceX is trading up 5.4% on Nasdaq on the second day of its listing. SpaceX also owns AI company xAI. This successful launch indicates that there is still huge demand for AI among investors. The market has given SpaceX a total value of more than $2.1 trillion, which is more than the combined value of Exxon Mobil, Bank of America and Coca-Cola. Bond yields fall, risk of interest rate hike reduced. The bond market has also got relief due to falling crude oil prices. Investors hope that lower inflation will reduce the pressure on central banks around the world to raise interest rates. Due to this, the 10-year US Treasury yield has come down to 4.45% from 4.48% late Friday evening. Last week, Europe’s Central Bank raised interest rates to tackle inflation, putting pressure on investments such as stocks and cryptocurrencies. Keeping an eye on the Federal Reserve meeting, Trump is demanding to reduce the rates. The US central bank Federal Reserve (Fed) is going to give its decision on its interest rates this week. This will be the first meeting of the Fed under the leadership of new Chairman Kevin Warsh. President Donald Trump had nominated Kevin Worsh for this post and Trump is continuously advocating for reducing interest rates. However, given the strong labor market and high inflation, traders were hopeful that the Fed might raise rates this year, but after the US-Iran deal, according to CME Group data, the probability of increasing interest rates this year has dropped from 71% to just 55%. After the two-day meeting ends on Wednesday, the Fed may announce keeping the interest rates stable. Indian stock market also closed with a rise. Indian stock market also closed with a rise on Monday due to the news of possible peace agreement between Iran and America. Sensex closed at 76,264 with a gain of 736 points. Nifty also gained 231 points and closed at the level of 23,853. Today there was a rise in Asian markets too. What is bond yield? This is the return (interest) that investors receive on government bonds or securities. When market uncertainty or inflation increases, bond yields also increase in anticipation of central banks raising interest rates. When the threat of inflation averts due to falling oil prices, bond yields fall, which is considered positive for the stock market. Also read this news… Wholesale inflation highest in 43 months: reached 9.68% in May; Fuel became expensive, prices of grains and oil also increased. Wholesale inflation (WPI) has increased to 9.68% in May. Earlier in April it was at 8.26%. Inflation in May is the highest in 43 months. It reached 10.70% in September 2022. The Commerce Ministry has released wholesale inflation figures today i.e. on June 15. The reason for increasing inflation is the increase in prices of daily essential goods and fuel. Apart from this, grains and oil have also become expensive. Actually, there has been tension between America and Iran for three and a half months. If conditions do not normalize, inflation may increase further. Read the full news…
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US-Iran agreement boosted stock markets around the world: Crude oil fell 4.8% to $83; Shares of American AI-airlines companies jumped by 7.8%
