Stocks closed higher yesterday across the board, led by the Nasdaq with an outsized gain of 3.07%, followed by the S&P 500 with 1.65%.

It should also be noted that new all-time highs were seen by the Dow, the small-cap Russell 2000, and the mid-cap S&P 400.

The market cheered the news that the U.S. and Iran have reached an agreement (Memorandum of Understanding or MOU) that puts an end to the war in Iran, and opens the Strait of Hormuz.

On Sunday, President Trump said the deal is now complete, and that "I hereby fully authorize the toll-free opening of the Strait of Hormuz, and simultaneously authorize the immediate removal of the United States Naval blockade."

Note: over the next 60 days, talks around implementation of various aspects of the deal will be hashed out. And Iran has said it will respond to any breaches of the commitment.

Nonetheless, the deal is to "immediately and permanently" end the war.

While stocks continued to soar, crude oil continued to retreat. Crude was down roughly -4% yesterday, adding to last week's decline. And from its conflict high back in April, it's down -31%.

President Trump is in France for the next three days for the G7 summit.

But is expected to be part of the official signing ceremony for the U.S.-Iran peace agreement in Switzerland on Friday, June 19.

Granted, many details of the agreement have not been fully hashed out yet, and will be negotiated over the next 60 days. But it's clear both sides prefer a diplomatic solution.

In other news, yesterday's Empire State Manufacturing Index eased to 5.7 from last month's 19.6 and views for 12.5.

Industrial Production came in at 0.1% m/m vs. last month's upwardly revised 0.9% (from 0.7%), and estimates for 0.2%. Manufacturing Output was flat (0.0%) vs. last month's upwardly revised 0.7% (from 0.6%), and forecast for 0.3%. And the Capacity Utilization rate ticked up to 76.2%, in line with the consensus, and up from last month's 76.1%.

Aside from the G7 meeting and the peace deal, the Fed's 2-day FOMC Meeting, which concludes on Wednesday, 6/17, will be the main event for the market this week. This will be the first meeting helmed by the new Fed Chairman Kevin Warsh. Additionally, we'll get the Fed's next SEP (Summary of Economic Projections), which only comes out 4 times a year (quarterly). And it will provide outlooks for GDP, unemployment, and the Fed Funds rate, for the next 3 years.

The latest FOMC Minutes from the Fed meeting in May, showed the Fed as somewhat split, with some looking for rate cuts, while others were considering possible rate hikes if inflation persists.

Last quarter's SEP, however, still suggested a quarter point rate cut by year's end. We'll see if that sentiment remains in this quarter's SEP or if that is modified.

In the meantime, today we'll get the Housing Starts and Permits report, and the Import and Export Prices report.

See you tomorrow,