Oil tumbles and stocks rise on US plan to end the Iran war
NYSE
- US stocks rose and oil prices slid on reports that a US-crafted ceasefire proposal was sent to Iran.
- The proposed ceasefire deal includes securing shipping flows through the Strait of Hormuz.
- State media reported that Iran rejected the deal and outlined their demands for a peace agreement.
Investors cheered reports of a US peace plan to end the Iran war on Wednesday, with stocks rallying and oil prices dropping.
The market pared back dramatic moves seen earlier in the day after Iranian state media reported that Iran rejected the US proposal and outlined their own conditions to end the war.
US West Texas Intermediate crude oil was down 2% to $90.57 while Brent crude was down 3% to $97.13, pulling back from deeper declines around 5% seen earlier in the day.
Major indexes were still trading higher midday in Wednesday's session, but pared the biggest gains.
Here's where major indexes stood around noon ET.
S&P 500: 6,590.31, up 0.5%
Dow Jones Industrial Average: 46,404.15, up 0.6% (+280.09 points)
Nasdaq Composite: 21,926.30, up 0.75%
Bond yields dipped. The 10-year US Treasury was down seven basis points to 4.32%. Yields have spiked during the nearly month-long war, with investors weighing the impacts on inflation and the outlook for interest rates.
Iranian state media reported that the country rejected the 15-point ceasefire proposal sent by the US. The report outlined five demands by Iran, including reparations and recognizing Iran's sovereignty over the Strait of Hormuz.
The US proposal reportedly included securing access to the Strait of Hormuz.
Deutsche Bank said on Wednesday that most of the clients it surveyed believe a ceasefire will be finalized by mid-April. However, even if that timeline proves correct, respondents also believe that the Strait of Hormuz will take longer to normalize and that Brent oil will be about $100 a barrel for a few more months.
The market moves on Wednesday mirror price action on Monday, when oil fell and stocks rose after Trump posted on Truth Social that "productive conversations" between the US and Iran had taken place.
Trump's post catalyzed a TACO trade moment for markets, but Iran responded, saying that talks hadn't occurred, further clouding the possibility of a resolution.
Marko Kolanovic, JPMorgan's former quant chief, summed up the conflicting messages the market is receiving.
"So if one can't trust US or Iranian comments and post, then one should rely on (the only) relevant fact - is oil going through Hormuz? Answer is: NO."
Following reports of a ceasefire proposal, Kolanovic said, "It's relatively easy to talk down oil futures prices, but it is impossible to talk up level of fuel in tanks."