CNBC Daily Open: Relief rally rolls on as Mideast deal boosts sentiment

Hello, this is Gail Krishnan writing to you from Singapore. Welcome to another edition of CNBC's Daily Open.

As we continue to monitor the drip-feed of details emerging on the U.S.-Iran framework agreement, the markets so far are liking what they're hearing. Equities are hitting fresh highs, oil is down and yields are pulling back. Attention will next turn to how this will play out for the raft of central banks meeting this week.

The U.S. markets kicked off the trading week on a high from the Washington-Tehran deal aimed at ending the Mideast war. The Dow hit a fresh record and tech stocks rallied sharply, driving the Nasdaq to its best one-day performance since late March.

At the G7 summit in Evian-Les-Bains, President Donald Trump said a deal has been agreed as he met with French President Emmanuel Macron. "I'm very happy to say it's signed. The deal's all signed. And the strait is already partially opened. As you know, they're doing a little hunting for a couple of mines that they've already found. But it's essentially ships are starting to go out now. On Friday, it'll be completely opened."

The formal signing is expected in Geneva on Friday. Trump said while he was unsure of attending the ceremony, Vice President J.D. Vance will be there. Vance told CNBC there were still a lot of details to be ironed out, but he expects the Strait of Hormuz "to be opened in a toll-free way for the long term."

"We fundamentally have all the cards here. We don't have to give the Iranians anything if they don't make the commitments that we want long term on the nuclear program," Vance said.

The full details of the agreement are expected to be released after the formal signing on Friday.

Crude prices closed about 5% lower Monday in New York, but were stabilizing in early Asian trading Tuesday.

Against that backdrop of apparently waning Mideast tensions, that we'll be getting a raft of central bank decisions. Yields have started pulling back on expectations that rate hikes to deal with the fallout from the war could be pushed back. But the tricky thing with inflation is its lag time and the question policymakers will find themselves facing again is whether inflation is transient and can they look past it?

The Bank of Japan is widely expected to hike rates to their highest level in three decades as it further normalizes policy. BOJ Deputy Governor Shinichi Uchida will hold the post-meeting press briefing in the absence of Governor Kazuo Ueda, who is unwell.

The Reserve Bank of Australia is widely expected to take a breather after three straight hikes as it weighs growth risks versus inflation.

And Kevin Warsh will helm his first meeting as Fed chair. The positive Iran developments and pullback in yields will no doubt take some pressure off him. No change in rates is expected at this meeting, but his guidance will be closely watched.

Meanwhile, the AI and tech-fueled rally continues. SpaceX sky-rocketed another 20% in its first full day of trade. Its underwriters exercised the "greenshoe" option to bring its blockbuster IPO haul to $85.7 billion, with the company's market cap sitting north of $2.5 trillion.

Joining the AI borrowing frenzy - Nvidia. It's reportedly tapping the debt markets for the first time since 2021 with a planned $20 billion bond offering.

— Gail Krishnan

On Monday Fox announced it would acquire Roku for $160 per share in a cash-and-stock transaction. Fox plans to fund the cash portion of the deal with a combination of cash on hand and new debt. The company said it obtained a $12 billion loan for the transaction.

- Lillian Rizzo