Markets rally after reports of U.S.-Iran peace deal and Strait reopening

Global markets moved sharply at the start of the week after multiple reports said the United States and Iran had reached a peace agreement that would end the conflict and reopen the Strait of Hormuz. The move was quickly reflected across asset classes, with crude oil tumbling, U.S. stock futures rising and bitcoin also trading higher as investors reacted to the prospect of a lower geopolitical risk premium.

According to reports from several outlets, President Donald Trump said on Sunday that the U.S. had agreed to a peace deal with Iran. Separately, CNBC cited Pakistan Prime Minister Shehbaz Sharif as saying the U.S. and Iran had reached a deal to end the war. The reports said the agreement followed weeks of mixed messaging from Washington and Tehran about the course of the conflict, leaving markets uncertain until the latest announcement.

A key element of the reported agreement was the reopening of the Strait of Hormuz, a critical shipping route for global energy flows. MarketWatch said months of hostilities had shut the waterway and contributed to an oil shock that spread through the wider economy. With the route set to open again, traders responded by reducing some of the risk premium that had built into energy prices. Investing.com reported that oil slipped more than 4% after the news, underscoring how closely the market tied the deal to supply conditions.

Equity markets also turned higher on the prospect of reduced tensions in the Middle East. CNBC reported that U.S. stock futures jumped after the deal was announced, while Investing.com likewise said Wall Street futures surged. CoinDesk noted the same broad market move, saying U.S. stock futures were advancing as crude prices fell. The tone in futures trading pointed to relief among investors, particularly in sectors sensitive to energy costs and geopolitical disruption.

The move came after a solid stretch for U.S. equities, with CNBC noting that the three major indexes were already coming off a winning week. That backdrop may have added to the positive response in futures, as traders entered the new week with broader risk appetite already supported by recent gains. Still, reports also said the Federal Reserve remained in focus for markets, indicating that monetary policy and the path of interest rates continued to be important alongside the shift in geopolitical headlines.

Cryptocurrencies also joined the broader risk-on move. CoinDesk reported that bitcoin shot higher following the Iran peace-deal headlines. While the reports did not provide further detail on the size of that move, the reaction suggested that digital assets were benefiting from the same improvement in sentiment that lifted equities and pressured oil lower. Across markets, the common thread was a swift repricing of risk after news that the conflict may be ending and one of the world’s most important energy chokepoints may be reopening.