Major US stock indices advanced after the United States and Iran agreed to a temporary arrangement to reopen the Strait of Hormuz, a move that pushed oil prices lower and eased inflation concerns ahead of Federal Reserve Chair Kevin Warsh's first monetary policy meeting later this week. A 20% surge in SpaceX shares further boosted market risk sentiment.

The technology-heavy Nasdaq 100 Index climbed 3.1%, while the S&P 500 Index rose 1.7%.

The Philadelphia Semiconductor Index soared 5.4%, reaching a record high.

Chipmakers and artificial intelligence-related stocks broadly gained ground, with Micron Technology (MU) up 11% and SanDisk (SNDK) rising 6.5%.

US and Iranian officials are scheduled to formally sign the agreement in Switzerland on June 19. The text of the deal has not been released by either side, and it is expected that the most difficult issues will be addressed in subsequent phases.

Nvidia (NVDA) shares gained 3.5% as the chip giant is poised to raise $25 billion through an investment-grade bond offering.

Walmart (WMT) shares declined after China's State Administration for Market Regulation summoned the headquarters of its Sam's Club unit, urging it to strictly guard against food safety risks across the entire supply chain.

At the close, the S&P 500 Index was up 1.7% at 7,554.29.

The Dow Jones Industrial Average advanced 0.9% to finish at 51,671.03.

The Nasdaq Composite Index jumped 3.1% to 26,683.94.

The Nasdaq 100 Index increased 3.1% to 30,543.92.

The Russell 2000 Index rose 0.7% to 2,965.087.