A single diplomatic announcement just added $1.2 trillion to the S&P 500. The index closed 1.7% higher on June 15 after the US and Iran reached a deal that includes a ceasefire extension and the reopening of the Strait of Hormuz, the narrow waterway responsible for roughly 20% of global oil and liquids transport.
Oil prices dropped more than 4% to around $83 per barrel, and virtually every risk asset caught a bid.
The deal and the domino effect
President Donald Trump promoted the agreement on Truth Social, framing it as a reduction in geopolitical risk. Markets took the signal and ran with it.
The S&P 500’s 1.7% single-day gain translates to approximately $1.2 trillion in added market capitalization. Oil’s decline of more than 4% is the real engine behind the broader rally. Cheaper energy means lower input costs for corporations, reduced pressure on consumer prices, and a friendlier backdrop for the Federal Reserve to hold rates steady or even consider cuts.
