Stocks rise and oil falls as markets weigh truce signals

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Stocks rise and oil falls

Highlights

S&P 500 futures rose by 0.7%, while Brent crude dropped about 5% to $99 on hopes for a ceasefire.
The U.S. sent Iran a 15-point peace plan, but Tehran denies direct talks.
The market’s reaction remains cautious because oil prices are still significantly higher than before the war.

Futures on the S&P 500 rose by 0.7% in the Asian session, European futures increased by 1.2%, and FTSE 100 futures climbed by 0.7%. Brent crude dropped about 5% to $99 per barrel, while Japanese stocks rose by 3%, and markets in Australia and South Korea gained about 2%. This combination of movements reflects a decrease in tension but not a full return to pre-war market confidence: investors are still primarily reacting to headlines rather than confirmed agreements, Reuters reported.

Rally on hopes, but no clarity

The catalyst for the improved sentiment was reports that Washington had sent a 15-point plan for a possible ceasefire to Iran. The proposal was discussed amid preparations by the U.S. for additional military deployment in the region, which itself underscores the contradictory nature of the current moment: diplomatic signals are mixed with military pressure. At the same time, Israeli media reported that the U.S. was pushing for a one-month ceasefire to discuss the terms of the deal.

However, the market did not receive confirmation that a diplomatic breakthrough was truly imminent. Tehran continues to deny direct talks, and Iranian officials have publicly rejected the U.S. version of events. This is why the rise in stocks and the fall in oil prices appear restrained: investors are willing to take on risk, but only in limited amounts, understanding that any new attack or tough statement could quickly reverse the trend.

Oil prices fall, but market stress persists

The most noticeable reaction came in the oil market. The drop in Brent to $99 means traders are partially unwinding the extreme geopolitical premium that had built up over supply concerns from the Persian Gulf.

However, even after this fall, oil prices remain significantly higher than pre-war levels: according to market reports, Brent is still about 35% more expensive than it was before the conflict started. This limits the potential for a stronger rally in stocks and maintains caution in the currency markets, where the dollar has been relatively weak, trading at 158.9 yen and 1.1594 euros.

Fragile relief for global markets

The 0.7% rise in S&P 500 futures and the 5% drop in Brent to $99 show that the market is willing to believe in de-escalation but primarily links the ceasefire to the chance of restoring oil supplies.

However, as Iran continues to reject the negotiation framework and oil remains about a third higher than pre-war levels, this is not a reversal of the crisis, but rather a brief relief amid a lack of clarity.

In an earlier report, we noted that gold stabilizes after nine-day slide as Iran war reshapes market.

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