The euro advanced broadly in European trading on Monday against a basket of major currencies, reaching its highest level in two weeks against the US dollar as positive sentiment swept through financial markets following the announcement of a peace framework between the United States and Iran, which is expected to be formally signed in Switzerland on Friday.

Last week, the European Central Bank raised interest rates for the first time in three years in an effort to contain mounting inflationary pressures stemming from higher energy prices and geopolitical tensions in the Middle East.

The ECB also emphasized that future monetary policy decisions will remain fully dependent on incoming economic data and developments in inflation and economic activity across the eurozone, without committing to a predetermined path for interest rates.

The Price

• Euro exchange rate today: The euro rose 0.4% against the US dollar to $1.1617, its highest level since June 5, up from an opening level of $1.1569. The session low also stood at $1.1569.

• The euro ended Friday down 0.1% against the dollar, marking its second loss in three sessions amid ongoing geopolitical developments in the Middle East.

• The single currency gained 0.4% last week against the dollar, recording its second weekly advance in the past three weeks, supported by the ECB's interest rate increase.

US dollar

The US Dollar Index fell 0.4% on Monday, touching a two-week low of 99.42 and reflecting broad-based weakness in the greenback against a basket of global currencies.

Risk sentiment improved after US and Iranian officials announced agreement on a framework to end the conflict, lift the US blockade on Iran, and reopen the Strait of Hormuz.

Global oil prices

Oil prices fell more than 4% on Monday, extending losses for a third straight session and dropping to their lowest levels in three months as concerns over Middle East supply disruptions eased following the reopening of the Strait of Hormuz.

Developments in the Iran conflict

• The United States and Iran have reached a preliminary agreement to end the conflict, with a formal signing expected on Friday in Geneva.

• President Donald Trump confirmed the deal and announced the lifting of the naval blockade on Iranian ports, alongside the reopening of the Strait of Hormuz to global shipping traffic.

• Pakistani Prime Minister Shehbaz Sharif, who reportedly served as the key mediator, said the agreement includes an immediate and permanent ceasefire across all fronts, including Lebanon.

• Mediators have set Friday, June 19, 2026, as the date for the official signing ceremony between US and Iranian delegations in Switzerland.

• Under the draft agreement, Tehran has pledged not to pursue nuclear weapons and will accept strict inspection measures.

• Iran's Mehr News Agency reported that the memorandum of understanding includes a 60-day negotiation period on the nuclear file and calls for the release of $24 billion in frozen Iranian assets during the talks.

European interest rates

• Last Thursday, the European Central Bank raised interest rates by 25 basis points to 2.40%, marking the first ECB rate hike since September 2023 in response to inflationary pressures linked to the Iran conflict.

• The ECB acknowledged that the Iran war and the energy crisis have increased inflationary pressures across the eurozone and revised its inflation forecasts higher for 2026 and 2027.

• The central bank reiterated that future decisions will depend entirely on incoming economic data, geopolitical developments, and its assessment of core inflation.

• Reports indicate that the ECB is considering pausing policy normalization in July if energy prices remain near current levels.

• With oil prices falling, money markets have reduced the probability of a 25-basis-point ECB rate hike in July from 50% to 30%.

• Expectations for a 25-basis-point increase in September have also declined from 70% to 50%.

• Investors are now awaiting additional eurozone data on inflation, unemployment, and wage growth to reassess the outlook for ECB policy.

The Japanese yen strengthened in Asian trading on Monday against a basket of major and minor currencies, moving further away from its six-week lows against the US dollar as bargain buying emerged and market sentiment improved following the announcement of a framework agreement between the United States and Iran aimed at ending the conflict in the Middle East.

Later today, the Bank of Japan will begin its fourth monetary policy meeting of 2026, with policy decisions due on Tuesday. Markets widely expect the central bank to raise interest rates by 25 basis points to 1.0%, which would mark the highest level since 1995.

The Price

• Japanese yen exchange rate today: The dollar fell about 0.3% against the yen to ¥159.73, down from Friday's closing level of ¥160.19, after reaching an intraday high of ¥160.23.

• The yen ended Friday down 0.2% against the dollar, resuming losses that had paused the previous day as part of a recovery from a six-week low of ¥160.60.

US dollar

The US Dollar Index fell 0.4% on Monday, hitting a two-week low of 99.42 and reflecting broad weakness in the US currency against a basket of global peers.

Risk sentiment improved across global markets after US and Iranian officials announced agreement on a framework to end the conflict, lift the US blockade on Iran, and reopen the Strait of Hormuz.

Global oil prices

Oil prices dropped more than 4% on Monday, extending losses for a third consecutive session and falling to their lowest levels in three months as concerns about supply disruptions from the Middle East eased following the reopening of the Strait of Hormuz.

Developments in the Iran conflict

• The United States and Iran reached a preliminary agreement to end the conflict, with a formal signing expected on Friday in Geneva.

• President Donald Trump confirmed the deal and announced the lifting of the naval blockade on Iranian ports, alongside the reopening of the Strait of Hormuz to global shipping traffic.

• Pakistani Prime Minister Shehbaz Sharif, described as the key mediator, said the agreement includes an immediate and permanent ceasefire across all fronts, including the Lebanese front.

• Mediators have set Friday, June 19, 2026, as the date for the official signing ceremony between US and Iranian delegations in Switzerland.

• Under the draft agreement, Tehran has pledged not to pursue nuclear weapons and will accept strict inspection measures.

• Iran's Mehr News Agency reported that the memorandum of understanding includes 60 days of negotiations on the nuclear issue and calls for the release of $24 billion in frozen Iranian assets during the talks.

Bank of Japan

The Bank of Japan begins its fourth monetary policy meeting of 2026 later today, with a decision expected on Tuesday. Markets anticipate a 25-basis-point rate increase to 1.0%, the highest level since 1995.

Such a move would bring the Bank of Japan more in line with other major central banks that have adopted a more hawkish stance, including the European Central Bank, which raised interest rates last week.

Investors will also be looking for additional guidance on whether the central bank intends to continue raising rates in the coming months to address inflationary pressures linked to the Middle East conflict.

Responding to calls from President Donald Trump, major technology companies have begun building dedicated power plants alongside their new data center campuses to supply their own electricity needs independently.

The Trump administration argues that this approach will help shield consumers from sharp increases in electricity prices as data center expansion accelerates. However, energy experts warn that the outcome could be exactly the opposite.

As the rapid growth of artificial intelligence fuels an explosion in the number and size of data centers, electricity demand has surged dramatically. A report published by Business Insider in June estimated that if all data centers approved through 2025 become operational, they could consume between 224.3 and 358.8 terawatt-hours of electricity annually, representing an increase of as much as 50% compared with the previous year.

For comparison, that level of electricity consumption is roughly equivalent to Mexico's entire annual power usage, despite the country having a population of more than 130 million people.

Until now, data centers have relied almost entirely on local power grids, contributing to significant increases in energy costs for nearby consumers due to the sudden jump in demand.

"We are witnessing a massive transfer of wealth from residential electricity customers to large corporations, including data centers, utility companies, and their parent firms that profit from building additional energy infrastructure," said David Lapp, Maryland's People's Counsel, last year.

"The utility regulatory system is failing to protect residential consumers, which is worsening the energy affordability crisis," he added.

In response, lawmakers from both the Republican and Democratic parties have increased pressure on technology companies to bear the cost of their own energy needs.

Political pressure, combined with lengthy wait times for grid connections, has also pushed major technology firms to develop independent energy sources. While some projects rely on clean energy or hybrid systems combining natural gas with renewables, most of the new projects are powered primarily by natural gas.

The unintended consequence

At first glance, private power generation appears likely to reduce pressure on public grids and protect consumers from higher electricity costs. In practice, however, the effect can be the opposite when data centers rely heavily on natural gas, as most current projects do.

According to a report by Utility Dive, natural gas is a globally traded commodity. As data centers consume massive volumes of gas, they inevitably compete with other consumers, driving prices higher.

As a result, households could face rising heating and electricity bills at the same time.

The growth of decentralized power generation dedicated to data centers could also create what some experts describe as a "shadow grid" operating outside the regulatory framework that governs traditional utilities.

The report noted that a data center with its own gas-fired power plant contracts directly with gas suppliers rather than public utility companies, placing gas pricing outside the oversight of state regulators.

An unfair energy bill

These facilities can also leverage their scale to secure large-volume, long-term gas contracts, as seen in states such as Texas, Pennsylvania, and New Mexico. This allows them to obtain lower gas prices while potentially pushing costs higher for other consumers.

Concerns extend beyond pricing. Experts warn that the emerging "shadow grid" could become a significant source of greenhouse gas emissions that are not subject to the same regulatory scrutiny as traditional power generation.

Critics argue that the Trump administration's approach misses a major opportunity to encourage technology giants to invest in upgrading and expanding America's aging and increasingly strained electricity infrastructure.

Such investments would also benefit the technology companies themselves, as long waiting periods for grid connections have become one of the biggest obstacles to artificial intelligence expansion.

Experts contend that if large technology companies were required to shoulder a significant share of the cost of modernizing the power grid, it could help reduce energy prices for consumers while maintaining stronger oversight of energy production and emissions—delivering benefits for both households and the environment.

The S&P 500 and Dow Jones Industrial Average posted modest gains in choppy trading on Friday, supported by expectations of a near-term peace agreement in the Middle East, while investors prepared for the market debut of Elon Musk's SpaceX, which is expected to become the largest public offering in Wall Street history.

Investor sentiment improved after President Donald Trump said on Thursday that an agreement to end the Middle East conflict and reopen the strategically important Strait of Hormuz could be signed as early as this weekend, although Tehran has stressed that a final decision has yet to be made.

SpaceX shares are expected to begin trading on the Nasdaq later today, with the company projected to immediately become the seventh-largest publicly traded US company by market value, carrying a potential valuation of $1.75 trillion.

Only around 3% to 4% of the company's shares are expected to be freely tradable, while Reuters reported that demand for the IPO exceeded available shares by roughly four times.

"An industry-dominating company worth $1.77 trillion doesn't enter the market quietly—it pulls liquidity away from the rest of the market," said Joel Shulman, chief executive of ERShares, which manages a fund with exposure to SpaceX.

Shares of other space-related companies, which had rallied ahead of the listing, retreated in early Friday trading. Rocket Lab fell 5.4%, Intuitive Machines declined 8.3%, and Planet Labs lost 6.6%. In contrast, funds holding SpaceX shares, including Fundrise Innovation Fund, gained 3.4%.

Eight of the eleven major sectors within the S&P 500 advanced, led by the materials sector.

Meanwhile, the Philadelphia Semiconductor Index slipped 0.3% as chip stocks lost some momentum following a strong rebound in the previous session.

Shares of Broadcom, Micron Technology, and Marvell Technology fell between 1% and 2.5%.

Analysts believe part of the weakness in US equities and Bitcoin's 16% decline last week was driven by investors reducing positions ahead of the SpaceX offering.

"In the absence of new capital flowing into the market, it's mathematically inevitable that an offering of this size will affect other companies," Shulman said.

US equity funds recorded their first weekly outflows in three weeks, while the US technology sector officially entered correction territory earlier this week.

As of 9:32 a.m. Eastern Time, the Dow Jones Industrial Average rose 303.74 points, or 0.60%, to 51,152.85. The S&P 500 gained 13.30 points, or 0.18%, to 7,407.60, while the Nasdaq Composite slipped 25.38 points, or 0.10%, to 25,784.28.

All three major US indexes were on track to finish the week with limited changes as uncertainty surrounding the Iran conflict persisted, alongside concerns that the powerful rally in artificial intelligence stocks may have become overstretched.

SpaceX, which also includes Starlink and xAI, has already broken several traditional Wall Street conventions. Index providers including Nasdaq and FTSE Russell modified listing requirements to facilitate the company's inclusion, while SpaceX set its share price at $135 even before beginning its roadshow, highlighting Elon Musk's considerable influence over the offering process.

Despite the excitement surrounding the IPO, some analysts have warned about the company's financial fundamentals after it reported annual losses exceeding $4 billion last year.

Data released earlier this week also showed inflationary pressures continuing to build due to higher energy costs linked to the Middle East conflict.

Oil prices fell below $90 per barrel following Trump's remarks, while traders pushed expectations for a Federal Reserve rate hike back to December from October, according to the FedWatch tool.

Among individual stocks, Adobe fell 8.6% after the departure of Chief Financial Officer Dan Durn.

Advancing stocks outnumbered decliners by a ratio of 2.06-to-1 on the New York Stock Exchange and 1.36-to-1 on the Nasdaq.

The S&P 500 recorded 20 new 52-week highs and two new lows, while the Nasdaq registered 78 new highs and 20 new lows.