“Let the oil flow.” With those words on Sunday evening, US President Donald Trump and Pakistani Prime Minister Shehbaz Sharif jointly announced that the United States and Iran have reached an agreement to end the war after more than 100 days, and to reopen the Strait of Hormuz. The memorandum of understanding will be officially signed on Friday, June 19 in Switzerland. Markets responded immediately: Brent crude dropped to a three-month low, US futures are higher, and the cleanest risk-on backdrop of the quarter has arrived just in time for FOMC week.
Key Takeaway
The US and Iran announced a peace deal Sunday, ending a 100-day conflict. The MOU will be signed Friday, June 19 in Switzerland and includes reopening the Strait of Hormuz, lifting the US naval blockade, and ending Iran oil sanctions. Brent crude dropped 4.7% to $83.25 and WTI fell 5.1% to $80.53 by Monday morning, both at three-month lows. US futures are firm, tech and AI names lead the bid, energy stocks (XLE) underperform, and the FOMC meeting tomorrow now sits against a clearly disinflationary energy backdrop.
What Changed Overnight
The announcement came late Sunday in Washington. Pakistan, which mediated, confirmed both sides have agreed to the immediate and permanent termination of military operations on all fronts, including in Lebanon. A 14-page draft memorandum is now finalised. Headline terms: the US lifts the naval blockade of Iranian ports, Iran commits to reopening the Strait of Hormuz within 30 days, US oil sanctions are removed, and the deal reportedly includes provisions for dismantling Iran’s nuclear program in exchange for economic incentives. The Strait of Hormuz carries roughly one-fifth of global oil shipments, so the reopening is the single most important supply development of the year.
Brent crude futures fell $4.08 (-4.7%) to $83.25 a barrel by Monday morning Asia trading, with WTI at $80.53 (-5.1%). Both contracts are now at their lowest levels since March 10, following Friday’s 3%+ drop. The peace deal removes the geopolitical risk premium that had built into crude through April, May and the first half of June.
Asia Markets This Morning
Asia opened the week strongly on the risk-on combination of lower oil and a major geopolitical de-escalation. Japan’s Nikkei 225 and South Korea’s Kospi both pushed higher in early trading, with energy importers benefiting most. SK Hynix and Samsung extended their multi-day chip rebound. India’s Nifty traded above 23,500 with the Sensex up firmly at the open, and the rupee strengthened to a five-week high against the dollar. Hong Kong’s Hang Seng and China’s CSI 300 also opened higher, with copper extending gains on improved global growth pricing.
The most direct Asia beneficiaries are net oil importers – Japan, South Korea, and India – all of which see input cost relief from the move in crude. The energy-exporting economies (parts of the Middle East, Brazil) see the opposite. US S&P 500 futures and Nasdaq 100 futures are firm into the pre-market.
Today’s Main Event: What the Deal Changes for Markets
The peace deal resets four things for global futures traders.
First, the inflation path. Oil at $80 versus oil at $93 is a meaningfully different macro picture. Lower energy feeds directly into headline CPI, which had printed at a three-year high of 4.2% just last week. The FOMC, which meets tomorrow and Wednesday, now sees its inflation problem partly disarmed without having to lift rates. This is broadly bullish for the rate-sensitive complex: tech, AI, growth equities, and crypto-linked names.
Second, the energy sector. The XLE energy ETF available on the platform faces a real overhang now that the Iran supply normalization is on a calendar. US shale economics also tighten as crude moves into the low $80s. Energy is the cleanest underperformer in today’s tape.
Third, emerging market sensitivity. Brazil (EWZ on the platform) is a mixed read: lower oil hurts Petrobras and the broader commodity export complex, but the global risk-on tone supports the broader EM trade. Net effect is muted.
Fourth, the cross-asset reset. Gold sees safe-haven outflows. The US dollar softens against most majors on the risk-on flow. Bitcoin and crypto-linked equities (MSTR, COIN on the platform) benefit from the same combination of lower inflation pricing and risk-on sentiment that lifts tech.
Stocks in Focus
Energy ETF (XLE)
The clearest underperformer today. With WTI back below $81 and the Strait of Hormuz set to reopen within 30 days, the geopolitical premium that supported energy through April and May is unwinding. Watch the open for a gap lower.
NVDA, AMD, AVGO, ARM, MU
AI chip names are the cleanest beneficiaries of lower oil and the disinflationary read into Wednesday’s FOMC. The semis bounce that started Thursday now has a fundamental tailwind to extend. Premarket strength matters, but watch whether the gains hold into the US close.
SpaceX (SPCX), Tesla (TSLA)
SPCX enters day two of trading after Friday’s 19% debut close at $160.95 and a further 3% after-hours bid. TSLA carries Musk-halo flows. The risk-on tape supports both, though IPO action typically becomes more volatile in the second and third sessions.
Strategy (MSTR), Coinbase (COIN)
Crypto-linked equities benefit from the dollar-soft, risk-on combination. Bitcoin firmed into Monday on the same flows. Watch for follow-through if the FOMC delivers a less hawkish dot plot Wednesday.
Brazil ETF (EWZ)
Mixed setup. Lower oil weighs on Petrobras and the Brazilian commodity complex, offsetting the broader EM risk-on tone. The barbell trade against US tech weakness that worked last week is less attractive now.
Index Levels Traders Are Watching
Nasdaq Composite held above 25,900 into the Friday close. With oil sharply lower and US futures positive into Monday, the immediate level to watch is the 26,000 to 26,200 zone overhead. A clean break above on Iran-deal volume opens the path toward the early-June highs near 26,800. Below, 25,500 is the line that has to hold ahead of Wednesday’s FOMC.
S&P 500 trades around 7,420. The 7,450 to 7,500 zone is the immediate overhead. Levels are reference points for context, not entry or exit signals.
The Week Ahead
Monday June 15: Empire State Index, Industrial Production, NAHB Housing. Tuesday June 16: FOMC meeting begins, Bank of Japan rate decision, May housing starts. Wednesday June 17: FOMC rate decision, dot plot and SEP at 2 PM ET, May retail sales, CarMax (KMX) earnings. Thursday June 18: Accenture (ACN) and Kroger (KR) earnings. Friday June 19: US-Iran MOU signing in Switzerland, and US markets closed for Juneteenth. A historically heavy week compressed into four US sessions.
Bottom Line for Today
The single biggest geopolitical overhang of 2026 just lifted. Oil is back at March levels, the Strait of Hormuz reopens within the month, and the FOMC meets tomorrow into a meaningfully friendlier inflation picture than it had a week ago. Energy is the sector to watch on the downside; tech, AI, and crypto-linked equities are the names that benefit most from the combination of lower oil and a less hawkish Fed setup. Friday’s signing in Switzerland is the next event to anchor positioning around, though it falls on a US holiday. Today is the day the market resets.
Frequently Asked Questions
Q1. When will the US-Iran peace deal be officially signed?
The memorandum of understanding is set to be signed on Friday, June 19, 2026 in Switzerland, according to Pakistani Prime Minister Shehbaz Sharif, whose government served as mediator. The reopening of the Strait of Hormuz is set to follow within 30 days of the signing, and the US naval blockade of Iranian ports is to be lifted upon signature.
Q2. Why did oil prices drop more than 5% today?
Brent crude fell 4.7% to $83.25 and WTI fell 5.1% to $80.53 because the US-Iran peace deal removes the geopolitical risk premium that had built into oil over the past three months and clears the path for Iranian oil to return to the global market. The Strait of Hormuz, which carries roughly one-fifth of global oil shipments, will reopen within 30 days of the Friday signing.
Q3. How does the Iran peace deal affect Nasdaq and US tech stocks?
Lower oil reduces the inflation pressure that had driven the Nasdaq's early-June selloff. With CPI back under downward pressure, the FOMC meeting tomorrow and Wednesday now sits against a less hawkish backdrop, which supports rate-sensitive growth and AI names. Tech and chips are the cleanest beneficiaries of the deal, alongside crypto-linked equities.
Q4. What does the Strait of Hormuz reopening mean for global trade?
The Strait of Hormuz carries approximately one-fifth of the world's seaborne oil shipments and is the single most important chokepoint in global energy logistics. Its closure during the conflict had forced ships to reroute and pushed shipping costs higher. The reopening, scheduled within 30 days of Friday's signing, restores normal flow and removes a significant cost on global commerce.
Disclaimer
This article is for educational and informational purposes only. It is not investment advice and should not be treated as a buy, sell, or hold recommendation for any security or financial product. Trading in futures and similar instruments involves significant risk including the potential loss of capital. Past performance is not indicative of future results.
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