Oil prices drop and stock markets rise after reports of deal to end Iran war

Global oil prices fell and stock markets rallied on Wednesday following reports that the U.S. and Iran are nearing a deal to end their conflict, with Brent crude dropping to $97 a barrel before recovering [1]. Brent crude futures, the global oil benchmark, rebounded to over $101 after the initial drop from over $108 earlier in the day [1]. Major European stock indices closed sharply higher, with London's FTSE 100 and Germany's Dax up over 2% and France's Cac 40 gaining 3% [1]. In Asia, South Korea's Kospi surged 6.45%, Hong Kong's Hang Seng rose 1.22%, and Japan's Nikkei gained 0.38% [1]. The U.S. S&P 500 was up more than 1% [1]. The market movements followed an Axios report that the U.S. believes it is close to a one-page memorandum of understanding to end the war and begin detailed nuclear talks [1]. A spokesperson for Iran's foreign ministry told the Iranian Students' News Agency that a U.S. proposal to end the war was still under consideration [1]. However, former President Donald Trump later stated on Truth Social that any agreement by Iran is 'a big assumption' and warned of escalated bombardments if a deal fails [1]. Oil prices remain elevated compared to the $70-per-barrel level seen before the conflict began, which has slashed regional production and transportation [1]. The Strait of Hormuz, a chokepoint for about a fifth of global oil and gas shipments, has been effectively closed for weeks, driving up energy prices [1]. U.S. Secretary of State Marco Rubio said on Tuesday, 'We would prefer the path of peace. What the president would prefer is a deal' [1]. The U.S. is reportedly awaiting Iran's response on key points within 48 hours [1].