Financial markets sharply turned upward after reports of a possible peace agreement between the U.S. and Iran. In a matter of minutes, the U.S. stock market gained about $500 billion in capitalization, while oil prices plummeted on expectations of reduced tension around the Strait of Hormuz.
Bitcoin also remained in positive territory, trading around $77,600. Traders began to price in the scenario of a possible end to the conflict and a gradual return to stability in the oil market.
The Market Reacted Sharply to the Leak of the Draft Agreement
According to Al Arabiya, the parties are close to a final version of the draft agreement, with Pakistan reportedly acting as a mediator in the negotiations. The document calls for an immediate ceasefire and restoration of free navigation through the Strait of Hormuz.
This provision proved to be key for the markets. The Strait of Hormuz remains one of the most important arteries of global oil trade, so any risk of its blockage instantly affects energy prices and global inflation expectations.
After the reports emerged, the S&P 500 index accelerated its growth, and investors began to actively exit defensive oil positions.
Oil Plunged After the Geopolitical Premium
WTI fell by about 2.5–3% and dropped to $96.23 per barrel. The market quickly began to remove the so-called ‘war premium’ that had accumulated in recent weeks amid the conflict around Iran.
At the same time, some traders have already started buying the oil dip, betting that the situation remains unstable. Even if an agreement is reached, the market will need time to restore previous logistics chains.
Analysts at Rystad Energy warn that full normalization of tanker infrastructure could take six to eight weeks. Additionally, insurers and shipowners will need a few more weeks to return to normal operations.
Bitcoin Is Once Again Trading as a Macro Asset
BTC’s reaction once again showed how much the crypto market now depends on global macroeconomics and geopolitics. Amid rumors of de-escalation, bitcoin held near $77,600 and began to gradually move upward along with stock indexes.
A similar situation was already observed earlier this spring, when the market reacted to reports of a possible pause in strikes on Iran. At that time, BTC briefly rose to nearly $80,000 as risk appetite increased.
For traders, the logic remains the same: lower oil pressure reduces inflation risks, which potentially eases the Fed’s position and increases interest in riskier assets.
The Draft Deal Still Raises Many Questions
Despite market euphoria, the document itself remains unconfirmed officially. According to sources, the agreement provides for a gradual lifting of sanctions on Iran in exchange for compliance with the terms and monitoring by a joint oversight mechanism.
The parties are also discussing a commitment to refrain from strikes on infrastructure and to begin new negotiations on remaining disputed issues within a week.
At the same time, the market still does not understand how sustainable such an agreement could be. In particular, there are many questions about the role of the Islamic Revolutionary Guard Corps and the ability of Iranian authorities to control the internal situation.
Investors Fear a Repeat of the ‘News Pump’
Some market participants are approaching the situation cautiously. In recent months, investors have repeatedly faced situations where big geopolitical headlines sharply moved markets, but then failed to lead to real changes.
Therefore, some analysts believe that the current rise in stocks and fall in oil may be a temporary reaction to an unconfirmed leak.
This is especially true for the crypto market, where news around Iran has repeatedly caused high volatility and sharp liquidity movements.
Pakistan Unexpectedly Found Itself at the Center of Talks
The market paid special attention to Pakistan’s role in the negotiations. It is reported that Pakistan’s army chief Asim Munir visited Tehran on May 21, and the country acted as a mediator between Washington and Iran.
If confirmed, this would be one of the most unusual diplomatic channels of the current conflict. Previous attempts at negotiations through Islamabad had not produced results.
Now investors are closely watching to see if an official statement will appear in the coming hours. This will be the main trigger for further movement in oil, the stock market, and bitcoin.
What Comes Next?
For now, the market is trading on expectations, not the fact of a signed agreement. Therefore, volatility may remain high, especially in oil and cryptocurrencies.
If a ceasefire is indeed confirmed, pressure on the oil market may ease, and risk appetite will continue to recover. This could support stocks and the crypto market in the short term.
But if talks stall again, investors will quickly return to defensive scenarios. In that case, oil may accelerate its growth again, and bitcoin will face new pressure from macroeconomic risks.
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