S&P 500 soars on US-Iran ceasefire optimism

US-Iran ceasefire reports sent the S&P 500 and Nasdaq to record highs, eased oil prices, and boosted risk appetite. The deal, still pending approval, drove optimism in equities and crypto.

Reports of a preliminary 60-day ceasefire agreement between the United States and Iran triggered a strong rally in U.S. equity markets. Both the S&P 500 and Nasdaq reached new all-time highs, fueled by optimism over reduced geopolitical risks, especially concerning potential oil supply disruptions through the Strait of Hormuz. Brent crude prices dropped sharply, reflecting a decrease in risk premiums, while the CBOE Volatility Index hit its lowest level since January. Crypto markets also saw increased activity, though gains were more modest compared to equities. The proposed memorandum of understanding includes provisions for nuclear negotiations, sanctions relief, and unrestricted commercial shipping. However, it remains subject to final approval from President Donald Trump. Despite ongoing regional tensions, investors responded positively to the prospect of de-escalation, reassessing risk assets and supporting a risk-on sentiment across markets.