- Trump says the strait will be “wide open” on Friday.
- Iranian media say five vessels passed through the US blockade.
- Trump, Vance and Iran’s top negotiator sign text electronically.
Stocks mostly rose on Tuesday, with oil prices paring losses after the previous day’s euphoric rally sparked by the US-Iran peace deal that will reopen the crucial Strait of Hormuz.
Eyes are now on developments ahead of Friday’s signing ceremony in Switzerland, which will bring an end to more than three months of war that has sent shockwaves through energy markets and sent global inflation skyrocketing.
US President Donald Trump said ships were again moving through the strait and it would be “fully open” on Friday, while Iranian media said three oil tankers and two cargo ships had passed through the area that had been subject to a US naval blockade.
Tehran blocked the waterway after the US and Israel launched their war against Iran on February 28. The US then blocked shipping to and from Iranian ports.
However, a senior US administration official said Trump, Vice President JD Vance and Iran’s parliamentary speaker, Mohammad Bagher Ghalibaf, had already signed the text electronically.
“Investors are increasingly pricing in a lasting improvement in the geopolitical backdrop,” wrote Fiona Cincotta at City Index.
“However, with more details yet to be finalized, any setback could trigger a sharp market reaction. For now, confidence is growing that the Strait of Hormuz will reopen and energy supplies will return to normal.”
She added that “the key question is not whether a deal is done, but how quickly oil exports and production can recover”.
“Investors will also monitor compliance with the agreement and the speed of normalization of supply,” she added.
Oil industry observers warn that market conditions are likely to be tight for a period of weeks or months. New data from the US Department of Energy showed that strategic oil inventories fell last week to their lowest level since 1983.
Shipping companies warned on Monday that it was too early to safely resume sailing.
The deal sparked a huge relief rally across global stocks, with Wall Street’s Dow hitting a record high while crude oil prices fell nearly five percent.
Optimism remained largely intact on Tuesday, with both key crude oil contracts barely moving and inventories mostly rising.
Seoul once again led gains, rising more than 1% – a day after growing more than 5% – helped by new advances in the technology sector.
It came on the back of another big success for Elon Musk’s SpaceX, which for the second day in a row rose almost 20 percent after its IPO on Monday.
Shanghai, Singapore, Taipei, Wellington and Manila also rose, although Tokyo, Hong Kong and Sydney fell.
There was little reaction to news that Chinese retail sales fell last month for the first time since 2022.
Investors are keeping a close eye on the Bank of Japan’s policy meeting, where it is expected to raise interest rates to a 31-year high later in the day.
