Stock futures jump as U.S., Iran reach deal to end war

Stock futures surged Sunday night as investors quickly priced in a break in the U.S.-Iran war risk that had gripped markets for months. Dow Jones Industrial Average futures rose 342 points, or 0.7%, S&P 500 futures climbed 0.9%, and Nasdaq 100 futures advanced 1.4% after President Donald Trump said a deal with Iran was complete.

Oil moved in the opposite direction, underscoring how closely Wall Street tied the rally to easing tensions around the Strait of Hormuz. July U.S. crude futures fell 4.77% to $80.83 a barrel, while Brent August futures slipped about 4% to $83.77. Traders were also responding to Trump’s claim that Hormuz would reopen without a toll system, a signal that the market saw as a direct blow to the geopolitical risk premium that had built up since February.

The move was not just about one headline. CNBC said the conflict had been escalating for nearly four months, and that investors had been bracing for a prolonged fight and a long grind. That backdrop helps explain why the reaction was so sharp: after repeated warnings, sudden progress in talks looked less like a marginal update and more like a change in the entire odds structure for energy, shipping, and equities.

The political picture, however, remained fluid. Pakistan Prime Minister Shehbaz Sharif said the United States and Iran had reached a peace deal and would hold an official signing ceremony Friday in Switzerland. Reuters also reported that the agreement called for the immediate and permanent termination of military operations on all fronts, including in Lebanon. Before the announcement, U.S. and Iranian officials had said a text was in place and that Washington expected to sign an initial deal in the coming days, but Iranian state-run media and other reports showed Tehran had not yet fully settled its position.

That uncertainty is why the rally reads as a verdict on de-escalation, not a final settlement. Trump had signaled or said more than 30 times that a deal was near, according to a CNBC review of his social posts and public remarks, making markets unusually sensitive to confirmation. Asian stocks rallied Monday as oil tumbled, but the underlying wager is still the same: stability is being priced in faster than it has been politically secured.