S&P 500 hits record high as Iran deal hopes send oil below $100

The S&P 500 rose 0.4% to a record close, extending its winning streak to eight weeks, as Iran deal hopes sent crude below $100.

"Iran having nuclear capabilities and charging tolls in the Strait of Hormuz remain the biggest sticking points," said Kevin Green, market analyst. "That said, markets remain optimistic as stocks catch a bid and crude oil slides."

Futures pointed to further gains when trading resumes Tuesday, with S&P 500 futures climbing 0.8% to 7,547.0 and Nasdaq 100 futures surging 1.3% to 29,940.75. The Dow Jones Industrial Average also closed at a record high, while the Nasdaq Composite added 0.2% to finish near record territory. Brent crude fell more than 4% to below $98 a barrel after President Donald Trump said Washington and Tehran had largely negotiated a framework agreement to reopen the Strait of Hormuz, through which about a fifth of the world's oil flows.

The retreat in oil prices pressured the dollar and Treasury yields, with investors rotating back into equities after weeks of geopolitical uncertainty. Trump later cautioned there was "no rush" to finalize a deal, citing lingering disagreements over Iran's uranium stockpile and sanctions relief. U.S. markets were closed Monday for Memorial Day, with trading set to resume Tuesday.

Brent crude traded around $97.70 a barrel Monday afternoon after falling as much as 5.5% earlier in the session. The decline marked the biggest single-day drop since the conflict began in late February, when Iran effectively closed the Strait of Hormuz in retaliation for US and Israeli attacks.

The S&P 500's eight-week winning streak is its longest since 2021, reflecting broad market optimism that a diplomatic resolution will remove the primary source of energy supply risk. The Dow's record close and the Nasdaq's proximity to all-time highs suggest the rally has been broad-based.

US Secretary of State Marco Rubio said negotiators had a "pretty solid thing on the table" and an agreement could be reached soon, though Iran's foreign ministry spokesman cautioned that a deal was "not imminent." Trump said he had instructed negotiators "not to rush into a deal," after earlier suggesting one was close.

The potential reopening of the Strait of Hormuz would restore the flow of about 20 million barrels of oil and liquefied natural gas per day, removing a supply constraint that had pushed Brent above $100 and fueled inflation concerns across developed economies.

This article is for informational purposes only and does not constitute investment advice.