MCO Morning Wrap | Iran Relief Rally Rolls Into the Fed

Good morning. The Iran relief rally is still the only story that matters this morning, with oil draining lower and risk assets riding the wave after Trump declared the deal complete and the Strait of Hormuz set to reopen. The signing is Friday in Switzerland. Now the question is whether the Fed, which starts meeting today, lets the good mood run.

Crude is doing the heavy lifting. Brent is down about 3.95 percent to 83.88 dollars, WTI off 4.62 percent to 80.96, both at their lowest since early March. Iran's deputy foreign minister confirmed the memorandum text is finalized, and Trump says oil will flow once it is signed. The war premium that defined the spring is leaking out fast.

Europe went with it. The DAX climbed about 1.66 percent on Monday, with energy and industrial names leading as cheaper oil and lower geopolitical risk did the work. Calmer tape, broad bid.

Wall Street ran harder. The S&P 500 closed up 1.65 percent at 7,554.29, the Nasdaq jumped 3.07 percent on a tech-led surge, and the Dow added about 469 points, up 0.92 percent. Beaten-down growth names did the most catching up.

Asia is where it really showed. Japan's Nikkei surged more than 5 percent toward 69,600, while Hong Kong's Hang Seng was quieter near 24,840, up about half a percent.

Crypto joined the party. Bitcoin sits around 66,300 dollars after briefly touching 67,200, and ether is firmer near 1,760, both helped by the risk-on turn. BlackRock's new BITA Bitcoin ETF debuts on Nasdaq today, worth a watch. Gold is also holding its highs near 4,340 even with the risk-on mood, which says the bid is broad.

On the calendar, the FOMC kicks off today with the decision tomorrow, the first under new chair Kevin Warsh, and no change is expected. Watch the language more than the rate. US data and a Juneteenth close on Friday round out a shortened week.

So the setup is simple. Markets have priced the peace, and now they need the Fed not to spoil it.

That's the morning. Let's see if Warsh plays along.