US stocks rise after preliminary US‑Iran peace deal, oil dips

U.S. equity indexes surged on Tuesday following the announcement of a preliminary agreement to end the three‑month war between the United States and Iran. The Dow Jones Industrial Average closed up 469 points, or 0.9%, while the Nasdaq Composite leapt 795 points, a 3.1% gain, on the optimism that the Strait of Hormuz could reopen and oil prices would keep falling [2].

The market rally came as Brent crude fell 1.7% to $81.72 a barrel, its lowest level in three months, after the deal was disclosed [2]. Analysts at Deutsche Bank said the optimism “clearly stabilized” the market after a day of heightened expectations [2]. The price dip reflects hopes that the strategic chokepoint, which had been largely shut, will resume normal traffic, although Wall Street Journal reporting suggests full shipping could take up to two weeks [2].

Even as equities rallied, gasoline prices for American drivers remain high. The American Automobile Association reported a national average of $4.06 per gallon on Monday, down from a May peak of $4.48 but still well above the $2.98 level seen in late February before the conflict began [1]. Experts warn that any substantial relief at the pump may not arrive until 2027, as producers need months to ramp output and port bottlenecks linger [1].

The broader economic backdrop is mixed. U.S. inflation rose 4.2% year‑over‑year, driven largely by fuel costs, while food prices have surged—tomatoes up 40% and lettuce 16% year‑to‑date—adding pressure to household budgets [1]. Meanwhile, the Federal Reserve’s upcoming policy meeting adds another layer of uncertainty for investors.

The rally shows how quickly markets can react to diplomatic breakthroughs, but the lingering supply‑chain constraints and the time needed to restore oil inventories mean that any price relief may be gradual. Investors will be watching the formal signing in Switzerland and the next Fed decision to gauge whether the optimism can be sustained.