President Donald Trump said over the weekend that the United States and Iran had reached a peace agreement and would sign it on June 19.
Among other conditions, the agreement provides for the lifting of the US naval blockade and the reopening of the Strait of Hormuz. Crude oil fell 5% to around $80 a barrel. It is now down about 33% from its high of $120 in early March.
Stock markets rose following this news. Indexes rose around the world except Tel Aviv, and U.S. stocks rallied premarket. The Invesco QQQ ETF, which tracks the Nasdaq 100 Index, added 2% in premarket trading.
Bitcoin and precious metals also gained. The largest cryptocurrency briefly topped $66,000, and was recently up 2.7% over 24 hours, with most of the gain occurring on Sunday, shortly after Trump’s announcement. Gold rose nearly 3% over 24 hours to trade above $4,330 an ounce.
This extended ceasefire will remain in effect for an additional 60 days while negotiations on a final agreement continue. It is worth keeping in mind the many changes in the negotiations in recent months, including ceasefires, breakdowns and renewed agreements, which suggest that the path to a lasting resolution is unlikely to be straightforward.
