We are witnessing huge movements in the markets after Trump announced a peace agreement with Iran. This news has been confirmed by Israel’s N12, suggesting it is a broader deal that includes Lebanon as well.
We are seeing big, immediate moves in the markets with the S&P 500 up 1.3%, or just under 100 points. The Nasdaq rose 1.8% and the Russell 2000 rose 2.4%.
SPX intraday
The other big mover is gold, which fell below some key levels yesterday. It is back where it is today and is up $90 to $4,165 or 2.2%. Silver rises 4%
Treasury yields fell 5-7 basis points across the curve as inflation risks faded. The US dollar is broadly weaker and USD/JPY is approaching the 160.00 level on the downside.
The biggest loser is oil, which is trading $2.50 lower with the entire decline occurring as a result. I tend to worry about some of this leaking out, as oil was strangely stable today before the announcement.
Finally, this is potentially great news that ends a truly terrifying scenario of conflicting headlines and false starts for months. Either that or this is another false start and it’s not over yet. I have previously highlighted that Trump would be keen to make a deal due to low poll numbers, his birthday celebrations on June 14, and the US’s 250th anniversary celebrations on July 4.
Update: Axios’ Barak Ravid comes out with more:
- The agreement would extend the ceasefire, reopen the Strait of Hormuz and launch 60 days of negotiations over the Iranian nuclear program.
- Tehran has not yet confirmed his latest claims, but three sources familiar with the talks told Axios that key gaps have been resolved.
- Iranian officials told several countries on Thursday that the Tehran talks had resulted in an agreement in principle, but Supreme Leader Mojtaba Khamenei still needed to give final approval.
The New York Post spoke with the Post and said Trump told them the deal was “pretty much done.”
The next headline we’re looking for (and it’s big news) is confirmation from Iran, followed by a plan to open Hormuz.
Update: Fars News Agency, citing a source close to the Iranian negotiating team, reported that a draft text for a preliminary memorandum of understanding with the United States has not been approved yet.
I don’t view this report as necessarily negative, but it contradicts Trump’s statement: “Discussions with the Islamic Republic of Iran have been elevated to the highest level of Iranian leadership and approved.” Again, Trump describes this as “discussions” that did not agree on the final text but I have a hard time with Trump’s fading on that text.
