NEW YORK (AP) — Stock markets are rallying worldwide Monday, and oil prices are easing after the United States 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.

The S&P 500 rose 1.5% on hopes that this time, the announcement of an Iran-U.S. agreement will mean a long-term fix to a conflict that has sent inflation painfully upward for the entire world. The Dow Jones Industrial Average was up 611 points, or 1.2%, as of 10 a.m. Eastern time, and the Nasdaq composite was 2.4% higher.

Stocks got a lift after the price for a barrel of Brent crude oil fell 4.9% to $83.04, back to where it was in early March. While that’s still higher than its price of roughly $70 from before the war more than three months ago, it’s lower than the $100 plus it cost just a few weeks ago. The hope is that lower oil prices will take pressure off households and businesses, which have had to pay higher prices for everything from food to fuel to fertilizer because of the war with Iran.

Iran confirmed the agreement but signaled its implementation would not start until it’s signed, which Pakistan said would happen Friday in Switzerland. Broader negotiations on issues like Iran’s nuclear program are expected to continue over the next 60 days. That leaves opportunity for hiccups that could derail the agreement. And even if the deal does reopen the Strait of Hormuz, it will take months for the energy industry to get back to full speed.

For now, though, relief swept through financial markets worldwide.

On Wall Street, stocks of companies with big fuel bills were instant winners. United Airlines flew 4.2% higher, American Airlines climbed 3.9% and cruise operator Carnival rose 5.4%.

Stocks of companies enmeshed in the artificial-intelligence industry also jumped. These stocks have yo-yoed sharply in recent weeks, going from roaring to records to suddenly turning lower. The big concern is whether such stocks shot too high, too fast because of AI mania, and their careening moves have sometimes reversed direction by the hour.

Micron Technology rallied 7.7%, and Advanced Micro Devices rose 7.3%. Nvidia’s climb of 1.8% 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 7.9% in its second day of trading on Wall Street. Its successful debut on the Nasdaq suggested plenty of demand still exists among investors for AI. The market has given SpaceX a total value of more than $2.1 trillion, making it bigger than Exxon Mobil, Bank of America and Coca-Cola combined.

In the bond market, Treasury yields eased on hopes that lower oil prices will remove pressure on central banks worldwide to raise interest rates.

The yield on the 10-year Treasury eased to 4.45% from 4.48% late Friday.

[Photo Credit: AP Photo/Richard Drew] Trader Patrick Casey works on the floor of the New York Stock Exchange

Europe’s central bank last week became the first major one in the world to raise interest rates to combat high inflation. High interest rates can keep a lid on inflation, but they also slow economies and undercut prices for all kinds of investments, including stocks and cryptocurrencies. They hit investments seen as the most expensive in particular, and some critics are calling the AI industry a bubble where investment inflated too far.

The Fed will announce its latest decision on interest rates later this week, which will be the first under its new chair, Kevin Warsh. President Donald Trump nominated Warsh to the position, and Trump has been loudly calling for lower interest rates.

But traders see it as a near certainty that the Fed will leave its main interest rate steady after its two-day meeting ends Wednesday. Traders had been raising bets that the Fed may actually have to raise interest rates this year because of how high inflation has gotten and how solid the U.S. job market remains.

But the tentative deal between the United States and Iran means traders are now betting on only a 54% chance of a hike this year, down from 71% a week ago, according to data from CME Group.

Elsewhere on Wall Street, Roku fell 2.4% after the company announced that Fox Corp. is buying the streaming pioneer in a cash-and-stock deal valued at approximately $22 billion.

Roku's stock had already soared 20% Friday, when early media reports emerged about a deal, which will give Fox access to the Roku channel, first-party data and more than 100 million global streaming households. Fox's stock fell 18.6%.

In stock markets abroad, indexes climbed in Asia and Europe. Japan’s Nikkei 225 jumped 5% for one of the world’s biggest gains and finished at a record.

“This is great news,” said Takashi Hiroki, chief strategist at Monex. “Buying by foreign investors is leading the market with expectations of easing tensions around the situation in the Middle East.”

South Korea’s Kospi surged even more, 5.2%, thanks in part to continued rallies for AI winners like Samsung Electronics.

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AP Business Writers Matt Ott and Elaine Kurtenbach and Senior Producer Mayuko Ono contributed to this report.

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