Markets Rally on Reported U.S.-Iran Deal and Reopened Hormuz Strait

Global markets rallied on Monday after President Donald Trump announced on Truth Social that the United States and Iran had reached a final, full agreement to end the war. U.S. stock futures jumped sharply ahead of a shortened trading week for the holiday, led by Nasdaq futures, which rose 1.9%. S&P 500 futures gained 1.3%, and Dow Jones futures climbed 1%.

Pakistani Prime Minister Shehbaz Sharif said the official signing ceremony is expected on Friday in Switzerland. The two sides are describing the deal as a victory, and under its terms the U.S. and Iran have agreed not to attack each other and to enter a 60-day negotiation period aimed at dismantling Tehran’s nuclear program. In return, Iran is expected to receive financial benefits and easing of sanctions on its overseas oil sales.

One of the biggest drivers of the move was Trump’s announcement that he had approved the reopening of the Strait of Hormuz, a critical global oil shipping route, which will formally reopen once the agreement is signed. That eased fears of supply disruptions and sent oil prices tumbling, with WTI and Brent futures both falling more than 4%.

The risk-on mood also lifted other markets. Gold rose as much as 2.7% to $4,333.20 an ounce in Singapore, recovering from a 2.5% drop last week, while silver gained 4% and platinum and palladium also advanced. Iran’s deputy foreign minister confirmed the deal, and the Bloomberg dollar index slipped 0.2%. Analysts said gold has moved opposite oil since the war began in late February because higher energy prices fueled inflation concerns and kept interest rates elevated, helping push gold down about 18% since the conflict started. Investors are now looking to a busy week of data, but especially to the Federal Reserve meeting, the first under new chair Kevin Warsh. Markets are pricing more than a 98% chance that rates will be left unchanged at this meeting, even though an increase later this year is still expected.