Crude oil prices fell sharply Tuesday while equity markets rallied as optimism surrounding a potential U.S.-Iran agreement fueled expectations that disruptions through the Strait of Hormuz could gradually ease, reducing pressure on global energy markets and inflation concerns.
International benchmark Brent crude fell roughly 9% to $94.45 per barrel, while West Texas Intermediate crude dropped more than 6% to near $91. Nasdaq 100 futures climbed over 1% as investors rotated back into risk assets on hopes geopolitical tensions could gradually ease.
President Donald Trump said negotiations with Iran were "proceeding nicely," adding that discussions could lead to a broader agreement while warning that military escalation remains possible if talks fail.
"It will only be a Great Deal for all or, no Deal at all," Trump said in a social media post, while also urging Saudi Arabia, Qatar, Pakistan, Turkey, Egypt, and Jordan to join the Abraham Accords.
The market reaction reflects growing expectations that Washington and Tehran may be moving toward an interim agreement that could extend the current ceasefire, gradually reopen the Strait of Hormuz, and potentially ease months of supply disruptions that have driven elevated oil prices and heightened market volatility.
Pakistan military chief Asim Munir, who has served as an intermediary between both sides, reportedly told Chinese officials an agreement is "close to being reached." Meanwhile, Iranian officials traveled to Doha for consultations with Qatari leadership, with discussions also reportedly involving the release of frozen Iranian assets.
The nuclear issue remains one of the most critical components of negotiations and a major focus for financial markets because it directly impacts sanctions policy and the potential return of Iranian oil supply to global markets.
Trump said Iran's highly enriched uranium stockpile would either be transferred to the United States for destruction or eliminated under international supervision in coordination with Tehran.
"The Enriched Uranium will either be immediately turned over to the United States to be brought home and destroyed or, preferably, in conjunction and coordination with the Islamic Republic of Iran, destroyed in place," Trump said.
The comments reinforced reports that Iran has agreed in principle to give up its stockpile of highly enriched uranium as part of a broader U.S.-led framework aimed at ending the conflict and stabilizing the region.
Previous disagreements involving Iran's nuclear program and sanctions relief had reportedly slowed negotiations, making recent progress on uranium discussions a potentially significant breakthrough.
The U.S. and Iran continue negotiating maritime access through Hormuz, sanctions relief timelines, frozen Iranian funds, and long-term restrictions on uranium enrichment. Washington is reportedly pushing Iran to halt enrichment activities for an extended period and surrender more than 400 kilograms of highly enriched uranium.
Iran has also insisted that any ceasefire arrangement cover "all fronts," including regional conflicts involving Tehran-backed groups such as Hezbollah, while Israel continues demanding that any framework preserve its military flexibility and address missile and nuclear-related threats.
Iranian Foreign Ministry spokesman Esmaeil Baqaei cautioned that while progress has been made on several issues, a finalized agreement remains uncertain.
"It is correct that we have reached conclusions on a large portion of the discussion topics, but to say that this means the signing of an imminent agreement is something no one can claim," Baqaei said, adding that frequent changes in U.S. negotiating positions continue complicating talks.
For investors, however, the immediate focus remains macroeconomic.
A sustained decline in crude prices could ease inflation pressures, improve consumer spending conditions, reduce energy-related economic risks, and support broader equity market sentiment. The simultaneous drop in oil and rally in futures highlights how aggressively markets are now positioning for de-escalation and a potential normalization in Middle East energy flows.