U.S. stock futures jumped and oil prices tumbled on Sunday after the U.S. and Iran confirmed they reached a deal that would reopen the Strait of Hormuz, after weeks of dashed hopes. President Donald Trump said the deal is real this time and that oil will flow.
Stock Markets Surge on Iran Deal Confirmation
Futures tied to the Dow Jones industrial average leapt 430 points, or 0.87%. S&P 500 futures shot up 1.08%, and Nasdaq futures surged 1.77%. The broad market rally reflected investor relief that a long-awaited agreement between the U.S. and Iran had finally been confirmed by both sides.
According to MSN, markets cheered the Iran deal as investors waited for oil to start flowing again through the critical waterway.
Oil Prices Plunge as Strait of Hormuz Reopening Nears
U.S. oil futures sank 5.1% to $80.54 a barrel, while Brent crude tumbled 4.3% to $83.58. The sharp drop in oil prices came as traders priced in the expected resumption of oil shipments through the Strait of Hormuz, a vital passage for global energy supplies.
President Trump later added that the Strait of Hormuz would reopen on Friday, when the deal will be signed, and suggested more time was needed to remove mines in the narrow waterway, as reported by Fortune Magazine via Threads.
Gold Rises, Dollar Mixed as Investors Shift Positions
Gold rose 2.6% to $4,349.30 per ounce, as some investors moved into safe-haven assets despite the positive market sentiment. The U.S. dollar was down 0.25% against the euro and down 0.04% against the yen. The yield on the 10-year Treasury plunged 5.9 basis points to 4.426%, reflecting a shift in bond market expectations.
Trump Authorizes Strait of Hormuz Reopening
President Trump said: "Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz." He also stated that he never cared about regime change, signaling a shift in U.S. policy priorities toward economic stability rather than political upheaval in Iran.
Our Take: A Deal That Markets Have Been Waiting For
This is the confirmation that investors have been hoping for after weeks of false starts and dashed expectations. The market reaction — stocks up, oil down — tells a clear story: traders believe this deal will lower energy costs and reduce geopolitical risk. The reopening of the Strait of Hormuz is a big deal for global oil supplies, and the sharp drop in crude prices reflects that. In our view, the key question now is whether both sides can follow through on implementation. If oil starts flowing as promised on Friday, this could mark a turning point for inflation concerns and consumer prices. But given the history of broken promises on this front, some caution is still warranted.
