USD Strengthens as US Stocks Surge on Geopolitical Peace Optimism

US equity markets posted significant gains on Monday, with the S&P 500 rising 1.2%, the Nasdaq Composite surging 2.0%, the Russell 2000 climbing 1.3%, and the DJIA adding 0.7%. The rally was driven by growing market confidence in an imminent peace deal, with analysts suggesting over 90% of a positive resolution is now priced into markets. The Toronto TSX Composite also gained 0.6%. Travel, semiconductor memory, and Magnificent Seven tech stocks led the advance, while oil-related companies lagged, reflecting expectations that geopolitical de-escalation could ease energy supply concerns. The risk-on environment supports USD strength against traditional safe havens like JPY and CHF, while commodity-linked currencies such as CAD and NOK face headwinds from declining crude oil prices. Traders should exercise caution as the market approaches a potential 'sell the fact' scenario — a confirmed peace deal could paradoxically trigger profit-taking and a reversal in risk sentiment. Near-term positioning should account for the asymmetric risk of a deal falling through versus the limited upside remaining in the current rally.