Financial Markets                      06/15 09:26

   

   NEW YORK (AP) -- Stock markets are rallying worldwide Monday, and oil prices 
are easing after the United States and Iran reached a tentative deal to extend 
their ceasefire and reopen the Strait of Hormuz to get the global flow of crude 
going again.

   The S&P 500 rose 1.5% on hopes that this time, the announcement of an 
Iran-U.S. agreement will mean a long-term fix to a conflict that has sent 
inflation painfully upward for the entire world. The Dow Jones Industrial 
Average was up 611 points, or 1.2%, as of 10 a.m. Eastern time, and the Nasdaq 
composite was 2.4% higher.

   Stocks got a lift after the price for a barrel of Brent crude oil fell 4.9% 
to $83.04, back to where it was in early March. While that's still higher than 
its price of roughly $70 from before the war more than three months ago, it's 
lower than the $100 plus it cost just a few weeks ago. The hope is that lower 
oil prices will take pressure off households and businesses, which have had to 
pay higher prices for everything from food to fuel to fertilizer because of the 
war with Iran.

   Iran confirmed the agreement but signaled its implementation would not start 
until it's signed, which Pakistan said would happen Friday in Switzerland. 
Broader negotiations on issues like Iran's nuclear program are expected to 
continue over the next 60 days. That leaves opportunity for hiccups that could 
derail the agreement. And even if the deal does reopen the Strait of Hormuz, it 
will take months for the energy industry to get back to full speed.

   For now, though, relief swept through financial markets worldwide.

   On Wall Street, stocks of companies with big fuel bills were instant 
winners. United Airlines flew 4.2% higher, American Airlines climbed 3.9% and 
cruise operator Carnival rose 5.4%.

   Stocks of companies enmeshed in the artificial-intelligence industry also 
jumped. These stocks have yo-yoed sharply in recent weeks, going from roaring 
to records to suddenly turning lower. The big concern is whether such stocks 
shot too high, too fast because of AI mania, and their careening moves have 
sometimes reversed direction by the hour.

   Micron Technology rallied 7.7%, and Advanced Micro Devices rose 7.3%. 
Nvidia's climb of 1.8% was the strongest force pushing the S&P 500 upward 
because the AI chip company is Wall Street's most valuable company, giving it 
more weight on the index than any other.

   SpaceX, Elon Musk's rocket company that also owns the AI company xAI, rose 
7.9% in its second day of trading on Wall Street. Its successful debut on the 
Nasdaq suggested plenty of demand still exists among investors for AI. The 
market has given SpaceX a total value of more than $2.1 trillion, making it 
bigger than Exxon Mobil, Bank of America and Coca-Cola combined.

   In the bond market, Treasury yields eased on hopes that lower oil prices 
will remove pressure on central banks worldwide to raise interest rates.

   The yield on the 10-year Treasury eased to 4.45% from 4.48% late Friday.

   Europe's central bank last week became the first major one in the world to 
raise interest rates to combat high inflation. High interest rates can keep a 
lid on inflation, but they also slow economies and undercut prices for all 
kinds of investments, including stocks and cryptocurrencies. They hit 
investments seen as the most expensive in particular, and some critics are 
calling the AI industry a bubble where investment inflated too far.

   The Fed will announce its latest decision on interest rates later this week, 
which will be the first under its new chair, Kevin Warsh. President Donald 
Trump nominated Warsh to the position, and Trump has been loudly calling for 
lower interest rates.

   But traders see it as a near certainty that the Fed will leave its main 
interest rate steady after its two-day meeting ends Wednesday. Traders had been 
raising bets that the Fed may actually have to raise interest rates this year 
because of how high inflation has gotten and how solid the U.S. job market 
remains.

   But the tentative deal between the United States and Iran means traders are 
now betting on only a 54% chance of a hike this year, down from 71% a week ago, 
according to data from CME Group.

   Elsewhere on Wall Street, Roku fell 2.4% after the company announced that 
Fox Corp. is buying the streaming pioneer in a cash-and-stock deal valued at 
approximately $22 billion.

   Roku's stock had already soared 20% Friday, when early media reports emerged 
about a deal, which will give Fox access to the Roku channel, first-party data 
and more than 100 million global streaming households. Fox's stock fell 18.6%.

   In stock markets abroad, indexes climbed in Asia and Europe. Japan's Nikkei 
225 jumped 5% for one of the world's biggest gains and finished at a record.

   "This is great news," said Takashi Hiroki, chief strategist at Monex. 
"Buying by foreign investors is leading the market with expectations of easing 
tensions around the situation in the Middle East."

   South Korea's Kospi surged even more, 5.2%, thanks in part to continued 
rallies for AI winners like Samsung Electronics.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach and Senior Producer 
Mayuko Ono contributed to this report.

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