The stock market started a holiday-abbreviated week on a sharply higher note as a pullback in oil prices culminated in relatively broad gains and strong leadership from mega-cap and tech names. The S&P 500 (+1.7%), Nasdaq Composite (+3.1%), and DJIA (+0.9%) traded in a narrow range after the initial oil-driven opening gains, with the DJIA securing fresh all-time high levels.

Yesterday's announcement from President Trump that the U.S. and Iran have reached a peace agreement, which will include the reopening of the Strait of Hormuz and lifting Iran's naval blockade, provided the spark for a constructive session today. The deal is expected to be signed on Friday in Switzerland, and while questions remain around some of the tougher issues, including Iran's nuclear program, the market was satisfied by the progress and the subsequent slide in oil prices. Crude oil futures settled the session $3.98 lower (-4.7%) at $80.90 per barrel.

Importantly, mega-cap and tech stocks took part in the rally after some choppiness across the group last week. The information technology sector (+3.4%) finished with the widest gain, supported by a 5.5% advance across components of the PHLX Semiconductor Index. NVIDIA (NVDA 212.45, +7.26, +3.54%) reclaimed its 50-day moving average (207.60), while memory names Western Digital (WDC 653.53, +90.60, +16.10%), Micron (MU 1087.99, +106.38, +10.84%), and Seagate Tech (STX 1018.80, +87.76, +9.43%) were among the top-performing S&P 500 names.

Meta Platforms (META 593.48, +26.50, +4.67%) and Amazon (AMZN 246.10, +7.55, +3.16%) were among the other mega-cap standouts, which helped the communication services (+2.4%) and consumer discretionary (+1.9%) sectors also finish near the top of the leaderboard. The Vanguard Mega Cap Growth ETF finished 2.8% higher.

Though not yet a component of the S&P 500, SpaceX (SPCX 192.50, +31.55, +19.60%) traded sharply higher again in its second trading day, putting its total gain at roughly 40% above its IPO price.

Outside of the mega-cap realm, oil- and rate-sensitive stocks contributed to today's rally amid the pullback in crude prices. DoorDash (DASH 168.09, +17.51, +11.63%) was an S&P 500 standout, while a host of cruise lines and other travel-related names also contributed to the strength in the consumer discretionary sector.

The industrials sector (+1.4%) was another top mover, bolstered by solid performances across airline names and electrical product names, which have become increasingly linked to semiconductor performance.

Meanwhile, the energy sector (-3.6%) faced a sharp retreat amid the oil pullback, while the more defensive-oriented real estate (-0.9%), health care (-0.7%), and consumer staples (-0.5%) sectors also underperformed as growth stocks surged today.

Altogether, it was a relatively quiet session, as a lack of corporate news kept the major averages trading near their opening highs for most of the day. The retreat in oil prices improved sentiment across the market and helped alleviate some inflation and growth concerns, while mega-cap and technology stocks regained their footing after a volatile previous week

U.S. Treasuries started the week on a positive note, though some intraday backtracking left the complex with only a portion of its initial gains. The 2-year note yield settled down two basis points to 4.07%, and the 10-year note yield settled down two basis points to 4.47%.

• Russell 2000: +19.5% YTD
• S&P Mid Cap 400: +15.2% YTD
• Nasdaq Composite: +14.8% YTD
• S&P 500: +10.4% YTD
• DJIA: +7.5% YTD

Reviewing today's data:

• June Empire State Manufacturing 5.7 (Briefing.com consensus 12.5); Prior 19.6
• May Industrial Production 0.1% (Briefing.com consensus 0.2%); Prior was revised to 0.9% from 0.7%, May Capacity Utilization 76.2% (Briefing.com consensus 76.2%); Prior 76.1%
  • The key takeaway from the report is that manufacturing output moved sideways in May, reflecting a cooling down after some solid activity in April.
• June NAHB Housing Market 35 (Briefing.com consensus 37); Prior 37