Oil plummets more than 3% as the US and Iran reach a peace deal

Oil prices fell sharply after President Donald Trump announced that the United States and Iran had reached an agreement to reopen the Strait of Hormuz, easing fears of supply disruptions. WTI crude dropped 5% to $80.68 per barrel. Brent crude fell 4% to $83.47 per barrel.

Global markets started the week on a positive note in response to the peace deal. Dow futures rose nearly 1%. S&P 500 futures gained 1.1%.And Nasdaq 100 futures surged 1.8%.

Asian markets also rallied strongly with South Korea‘s Kospi jumping more than 5% and Japan’s Nikkei nearly 5%.

The agreement also led to a sharp decline in oil prices after Trump authorized the reopening of the Strait of Hormuz, easing concerns about disruptions to global energy supplies. U.S. crude oil fell nearly 5% as a result.

Looking ahead, investors will focus on key U.S. economic data, including housing and retail sales figures, as well as the upcoming Federal Reserve meeting. Markets currently expect the Fed to keep interest rates unchanged, with futures implying a greater than 98% probability of no rate change.

Gold prices moved higher on Monday, reaching a weekly high as investors reacted to the peace deal.

Despite the rebound, golds broader outlook remains cautious.The peace deal has also slightly reduced expectations for future Federal Reserve tightening. Markets now assign roughly a 65% probability of a Fed rate hike by year-end, down from about 70% last week.