TORONTO — Canadian and U.S. stock markets rallied after the U.S. 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.

Allan Small, senior investment adviser at iA Private Wealth, said news of the tentative deal spurred optimism in the market, which is currently driven by headlines and geopolitics.

“As long as this market believes this war is coming to an end, you’re going to see positive days (and) positive reaction. At some point, obviously, the market will start to focus on other things,” he said.

The S&P/TSX composite index was up 337.79 points at 35,275.64.

In New York, the Dow Jones industrial average was up 468.77 points at 51,671.03. The S&P 500 index was up 122.83 points at 7,554.29, while the Nasdaq composite was up 795.10 points at 26,683.94.

Stocks got a lift after the price for a barrel of Brent crude oil fell 4.8 per cent to US$83.17, back to where it was in early March. While that’s still above its price of roughly US$70 from before the war, it’s lower than the US$100-plus it cost just a few weeks ago.

The July crude oil contract was down US$4.13 at US$80.75 per barrel.

Iran confirmed the deal, but it does not include a final agreement on issues like Iran’s nuclear program. Negotiations on that are expected to continue over the next 60 days, which leaves opportunity for hiccups that could derail the agreement. And even if the Strait of Hormuz does fully reopen on Friday as expected, it will likely take months for the energy industry to get back to full speed.

Stocks of companies enmeshed in the artificial-intelligence industry also jumped. These stocks have yo-yoed in recent weeks, going from roaring to records to suddenly turning lower.

Nvidia’s climb of 3.5 per cent 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 19.6 per cent in its second day of trading on Wall Street.

Small said tech stocks have benefited from expectations that interest rates will not need to move higher.

The U.S. Federal Reserve will announce its latest decision on rates later this week, which will be the first under its new chair, Kevin Warsh. Traders see it as a near certainty that the Fed will leave its main interest rate steady after its two-day meeting ends Wednesday.

The tentative deal between the United States and Iran means traders are now betting on only a 57 per cent chance of a hike this year, down from 71 per cent a week ago, according to data from CME Group.

The August gold contract was up US$112.80 at US$4,351.60 per ounce.

The Canadian dollar traded for 71.52 cents US compared with 71.55 cents US on Friday.

This report by The Canadian Press was first published June 15, 2026.

— With files from The Associated Press

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

Daniel Johnson, The Canadian Press