S&P 500 extends rally to fourth straight session on optimism over potential Iran ceasefire

The S&P 500 extended its gains on Monday, marking a fourth consecutive session of advances as fluctuating oil prices and growing hopes of a potential end to the U.S.-Iran conflict lifted market sentiment.

The benchmark index rose 0.44% to close at 6,611.83, while the Nasdaq Composite added 0.54% to finish at 21,996.34. The Dow Jones Industrial Average gained 165.21 points, or 0.36%, ending the session at 46,669.88.

Investor optimism was supported by reports suggesting ongoing diplomatic efforts. According to Axios, the U.S., Iran, and regional mediators are discussing a possible 45-day ceasefire that could pave the way for a broader resolution, although the likelihood of reaching an agreement before the Tuesday deadline remains low.

Separately, Reuters reported that both nations have received a proposal outlining an immediate ceasefire and the reopening of the Strait of Hormuz, a critical global oil transit route. The plan, reportedly facilitated by Pakistan, could potentially take effect as early as Monday if accepted.

Meanwhile, President Donald Trump reiterated that the U.S. would target Iran’s power infrastructure if the Strait is not reopened by the specified deadline. He also signaled interest in securing access to Iran’s oil resources, while suggesting a desire to avoid further escalation.

Oil markets remained volatile, with U.S. West Texas Intermediate crude settling 0.78% higher at $112.41 per barrel. Brent crude also edged up 0.68% to close at $109.77 per barrel.

Market uncertainty persisted, as reflected in the elevated CBOE Volatility Index (VIX), which remained above 24 following the latest geopolitical developments.

Overall, all three major U.S. indices closed higher, supported by cautious optimism surrounding potential de-escalation in the Middle East.