Agreement to reopen Strait of Hormuz triggers 4% drop in oil prices and 0.8% gain in S&P 500 futures in early trade.
Stocks and bonds rallied while the dollar weakened after the U.S. and Iran reached a deal to reopen the Strait of Hormuz and lift sanctions. U.S. crude futures fell over 4%, and S&P 500 futures rose 0.8% in Asia trade, with the euro climbing to $1.1616 against the dollar.
Markets had anticipated the agreement, muting extreme reactions. Analysts noted the focus would shift back to macroeconomic factors, though oil flows may take months to normalize. Prior tensions had kept oil prices elevated, with expectations now set for a gradual decline.
The dollar declined broadly, boosting risk-sensitive currencies like the Australian dollar and yen. Analysts cautioned against expecting a rapid return to $70 oil, citing logistical hurdles in resuming full production and shipping.