Stocks and Oil Prices Rise as Iran Tensions Continue

Stock markets around the world rose on Monday, June 29, as investors kept a close eye on a fragile peace deal between Iran and the United States. Oil prices also went up after both sides launched attacks on each other, making people worry the conflict could get worse. Meanwhile, Japan's currency, the yen, fell to its lowest level against the U.S. dollar in about 40 years.

U.S. stock markets had a strong day, led by technology companies that bounced back after falling last week. The Dow Jones Industrial Average gained about 363 points, the S&P 500 rose more than 81 points, and the Nasdaq jumped nearly 484 points. Investors had sold off tech stocks recently because they were worried about how much money companies were spending on artificial intelligence.

The conflict between Iran and the U.S. has been going on for several days. It started after an Iranian missile hit a cargo ship in the Strait of Hormuz, a narrow waterway that is very important for shipping oil around the world. Both countries accused each other of breaking a temporary ceasefire, or agreement to stop fighting.

Oil prices rose on Monday, but they are still much lower than they were earlier in the month. The price of U.S. crude oil went up about 1.86 percent to $70.52 per barrel, and Brent oil rose to $72.85 per barrel. The attacks made traders nervous because ships carrying oil have to pass through the dangerous strait, and any boat could be targeted.

One energy expert explained why oil prices are not likely to recover all at once. Bob Yawger, a director at financial company Mizuho, said it is not possible to suddenly ship as much oil as before the conflict started. He warned that as long as the situation is dangerous, ships traveling through the strait are at risk of being attacked.

The situation in the Middle East is also pushing up inflation, which means prices for everyday things are rising. Because of this, many investors think the U.S. Federal Reserve, the country's central bank, will raise interest rates to slow down inflation. Higher interest rates make borrowing money more expensive and can slow down the economy.

The U.S. dollar got stronger because of those expectations. A stronger dollar made gold less attractive to investors, so gold prices dropped about 1.9 percent to $4,010.32 per ounce. Gold is on track for its biggest quarterly drop since 2013, meaning it has fallen more in this three-month period than in any three-month period in over ten years.

Japan's currency, the yen, hit its weakest point since 1986, dropping to 161.97 yen per dollar. Japan's central bank recently raised its interest rate, but that did not help the yen very much. Analysts say the gap between U.S. and Japanese interest rates is still very wide, which keeps pushing the yen lower compared to the dollar.

Investors are also waiting for a big jobs report coming out on Thursday. The report will show how many people in the U.S. found jobs in June. Three months in a row of better-than-expected job numbers have already made the Federal Reserve more likely to raise interest rates, but a weaker jobs report could change that plan.