President Donald Trump announced late Sunday that the United States and Iran have agreed to a peace deal, ending a nearly four-month war that had shut down one of the world's most critical oil shipping routes. The announcement sent stock futures surging and pushed oil prices sharply lower.
According to CNBC, Pakistan Prime Minister Shehbaz Sharif posted the initial announcement on X. "Following intensive talks, we are pleased to announce that the Peace Deal between the United States of America and Islamic Republic of Iran has been REACHED," Sharif said. He added that "The official signing ceremony will be on Friday, 19 June in Switzerland." Pakistan served as a mediator between the two countries throughout the conflict.
Trump confirmed the deal shortly after Sharif's post. "The deal with the Islamic Republic of Iran is now complete," Trump wrote on Truth Social. He also authorized the reopening of the Strait of Hormuz and the removal of the US naval blockade. In a later post, Trump said the strait would open on Friday and added: "With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!"
The Iranian response was more guarded. Iranian state media broadcast a television banner reading that the US "was forced to sign an agreement to end the war," according to CNBC. The Iranian Foreign Ministry also said it holds the US and Israel "responsible for the dangerous consequences of the continued insecurity and tension in the region."
The deal came close to unraveling earlier Sunday. The Israel Defense Forces reported that Iran-backed Hezbollah in Lebanon had launched projectiles into Israel, and subsequent Israeli strikes in Beirut followed. Trump responded with a public warning to Iran and Hezbollah not to strike back. The signing ceremony in Switzerland is set for Friday, June 19.
European nations including the UK, Germany, France and Italy said Sunday they were willing to lift sanctions on Iran in exchange for Iran taking steps on its nuclear program. Reuters reported their joint statement included the line: "Iran must never acquire a nuclear weapon. We stand ready to work with the US, Iran and the IAEA to this end." Qatar's Ministry of Foreign Affairs also welcomed the agreement, saying it "considers it an important step towards consolidating sustainable peace and promoting economic growth regionally and internationally."
Markets reacted immediately. According to Yahoo Finance, Dow futures climbed more than 300 points, or 0.6%, while S&P 500 futures gained 0.8%. Nasdaq 100 futures led the advance, jumping 1.3%. West Texas Intermediate crude futures fell nearly 5% to $81 a barrel, and Brent crude fell over 3% to just above $84 a barrel, as concerns over supply disruptions eased.
The physical impact of the deal was already becoming visible before the signing. Bloomberg reported that a liquefied natural gas tanker that had been trapped in the Persian Gulf for over three months appeared to be heading toward the Strait of Hormuz, one of the first signs of movement in the waterway since the conflict began. However, a backlog of shipping traffic built up over months means the strait could take weeks to fully clear even after it officially reopens on Friday.
Investors enter the week with additional momentum after SpaceX made its public market debut last week, with shares soaring more than 19% in their first trading session and pushing the company's market value above $2 trillion. The Federal Reserve is also expected to announce its latest policy decision this week. Markets are pricing in better than a 98% probability that policymakers leave interest rates unchanged, according to CME FedWatch.
