Global equities surged and oil prices fell sharply on Wednesday after President Donald Trump signaled a potential peace deal with Iran, driving a broad risk-on rally across markets. Asian and European shares led the gains, while U.S. futures showed a more muted response.
The development marks a dramatic shift in geopolitical risk, with crude prices sliding over 4% as traders priced in the possibility of eased sanctions and increased oil supply. Trump claimed a 'great settlement' was taking shape, according to multiple sources, though formal negotiations have not been confirmed.
Oil tumbled below $90 a barrel in some trading venues following the president's remarks, with Brent crude shedding roughly 4%. Meanwhile, stock indices in Europe and Asia posted broad gains, with investors rotating out of safe-haven assets. The rally extended to U.S. futures, though gains were limited.
If a deal materializes, it could unwind the supply premium that has kept energy prices elevated, providing a tailwind for consumer-facing and industrial stocks. However, analysts caution that past negotiations have collapsed, and a final agreement remains uncertain. The potential SpaceX IPO also continues to draw trader attention, though no new details emerged.
Some experts question whether the breakthrough is substantive or merely rhetorical, noting that no official agreement has been signed. 'We've been here before with Iran talks,' one strategist told CNBC. 'The market may be getting ahead of itself.'