The first sign of the rally came in Asia. SoftBank Group shares surged more than 12% in Tokyo trading Monday after the United States and Iran announced a framework peace agreement covering the Strait of Hormuz, the waterway through which about a fifth of the world’s oil passes. By the time New York opened, the move had become a global one.
The Nasdaq Composite jumped 795 points, or 3.07%, to close at 26,683, while the S&P 500 rose 1.65% to 7,554. Oil prices tumbled as traders priced in the end of a threat that had hung over the region since the conflict began. A brief but costly war had spiked crude, rattled shipping lanes and kept a floor under every risk metric; Monday’s accord removed the floor all at once.
The agreement follows weeks of fighting that had pushed the region to the edge of a wider war. The framework, announced jointly by Washington and Tehran, covers freedom of navigation through the strait and a de-escalation of hostilities, according to officials, though the details have not been released in full. Both governments described it as a first step, with negotiations on a broader arrangement to follow.
For technology stocks, the logic of the move was simple. A geopolitical risk premium had been weighing on the longest-duration assets in the market, and when it vanished, the companies whose valuations depend on growth years in the future gained the most. Analysts said the session showed that, for tech, the removal of a tail risk can be worth more than a strong earnings report.
SoftBank led the advance among Asian technology shares, with the conglomerate’s portfolio of AI and semiconductor investments making it the purest bet in the region on a falling risk premium. Taiwan Semiconductor Manufacturing’s American depositary receipts also posted strong gains, and markets in South Korea and Taiwan followed. The pattern was the same everywhere: risk on, cash out, growth up.
The oil market told the other half of the story. Brent crude fell sharply as traders unwound positions built on the assumption of prolonged disruption, and shipping rates eased with the prospect of safe passage restored. Energy stocks lagged the broader market, the mirror image of a session in which the biggest losers of the past weeks became the biggest gainers.
Economists cautioned against reading too much into a single session. The accord is a framework, not a treaty, and the history of the region offers plenty of examples of agreements that collapsed on the way to implementation. Strategists said the market was celebrating the removal of a known threat while leaving room for the possibility that it returns in another form.
For investors, Monday’s tape showed how quickly the macro picture can change.
The war had been a slow tax on confidence, visible in elevated oil prices, cautious positioning and a defensive tilt in portfolios. Its resolution reversed all three in a day, and the speed of the reversal told investors something about how fragile the previous positioning had been.
The session’s losers were as instructive as its winners. Gold fell as the safe-haven bid unwound, defense stocks gave back some of the gains they had accumulated during the conflict, and energy shares lagged the broad advance. In Tokyo, the Nikkei posted its strongest session in months, and Seoul and Taipei followed, with chip makers and AI names leading everywhere. The rotation was global and uniform: out of safety, into growth.
SoftBank’s 12% surge was the purest expression of the trade. The conglomerate’s holdings span Arm, the chip designer at the center of the AI boom, and a portfolio of technology startups whose valuations had been penalized by the risk premium. With the strait open and the war winding down, the discount was lifted in a single session, and investors who had treated SoftBank as a war hedge unwound those positions in a hurry.
Strategists cautioned that the framework’s details remain thin. The agreement covers navigation and de-escalation, but the sanctions architecture, the fate of oil infrastructure and the guarantees on both sides are still to be negotiated, and markets have been burned by premature peace before. For now, though, the market is trading the outcome it can see, not the risks it cannot.
The question now is what comes next. If the framework holds, the oil market will find a new floor and the technology rally will have one less excuse to stall. If it does not, Monday’s gains will be given back as quickly as they arrived. For a single day, though, the market did what markets do best when the worst case disappears: it bought everything in sight, and the companies at the center of the AI boom led the way.
