Global equities rise as tentative Iran cease-fire deal lifts markets and oil prices dip

World equity markets rallied on Monday following a provisional agreement to end hostilities involving Iran and to reopen the Strait of Hormuz. The development prompted gains across major indices, with the S&P 500 up 1.2% and the Dow Jones Industrial Average rising 1% in early U.S. trading. In Europe, Germany's DAX and France's CAC 40 each climbed 1.7%, while Britain’s FTSE 100 added 0.8%.

In Asia, Japan’s Nikkei 225 jumped 5% to a new record high, driven by strong buying in technology and artificial-intelligence stocks. South Korea’s Kospi rose 5.2%, Hong Kong’s Hang Seng gained 0.6%, and China’s Shanghai Composite increased 1.6%. Australian and Indian markets also posted gains of more than 1%.

Oil prices retreated, with Brent crude falling $4.08 to $83.25 a barrel and U.S. West Texas Intermediate dropping $4.51 to $80.37. Analysts noted that the reopening of the Hormuz shipping lane could ease panic but cautioned that markets must still assess the gap between the headline announcement and actual compliance.

"The reopening of Hormuz is a relief valve, not a full peace dividend. The market can remove some crude panic, but it still has to price the gap between a headline, a signature, and a regime that actually complies," said Stephen Innes of SPI Asset Management.

U.S. President Donald Trump confirmed the initial agreement and lifted the naval blockade of Iranian ports. Iran affirmed the deal, indicating that implementation would await a signing ceremony scheduled in Switzerland. Negotiations on broader issues, including Iran’s nuclear program, are expected to continue over the next 60 days.

The market reaction came amid upcoming monetary-policy meetings, with the Federal Reserve and Bank of England set to announce interest-rate decisions later in the week and the Bank of Japan expected to raise its benchmark rate to 1%.