US stock markets today: Wall Street rallies, oil tumbles after US and Iran reaches deal; AI and travel stocks jump

The tentative US-Iran agreement signals a potential de-escalation of geopolitical tensions, triggering a broad equity market rally on Monday. This development reduces uncertainty premiums embedded in risk assets and improves the macro backdrop for equities, particularly cyclical sectors that benefit from lower geopolitical tail risks and improved sentiment.

Oil prices tumbled sharply following the accord, reflecting reduced supply disruption concerns and normalized energy market expectations. Energy sector weakness (XLE, crude futures) contrasts with strength in growth and discretionary equities. AI chipmakers NVDA and AMD benefited from the risk-on environment and improved investor appetite for higher-beta technology exposure, while travel stocks including AAL surged as lower fuel costs and confidence recovery supported the leisure sector.

The correlation between geopolitical relief and equity momentum is notably positive, as markets repriced both defensive hedges and cyclical exposure simultaneously. The inverse relationship between energy prices and equity indices reflects the complex tradeoff: while lower oil supports consumer purchasing power and margins, it reveals energy sector margin compression that offsets broad market gains.

Sector implication: Technology and Consumer Cyclical sectors emerge as primary beneficiaries, while Energy faces headwinds. This divergence underscores a rotation toward growth and consumption-linked equities, contingent on sustained geopolitical stability and the durability of the Iran deal framework.