Global financial markets surged Wednesday and oil prices tumbled after President Donald Trump suggested that the United States and Iran are moving closer to an initial agreement to end the two-month-old conflict — a conflict that has disrupted a fifth of the world’s oil and gas supplies and pushed energy costs to crisis levels.

Trump posted on social media that the war could soon end and that disrupted oil and natural gas shipments through the Strait of Hormuz might restart. But in the same breath, he made the stakes unmistakably clear: accept the deal, or face another bombing campaign.

The reaction in global financial markets was immediate and dramatic. The S&P 500 rose roughly one percent as investors priced in the possibility that the Strait of Hormuz — one of the world’s most critical energy chokepoints — could soon reopen to commercial shipping. Global share indexes approached record highs on improving investor sentiment, while U.S. crude oil prices fell below $100 per barrel for the first time in weeks.

Bond yields declined as investors anticipated less economic disruption if the conflict subsides. The U.S. dollar weakened slightly, hovering near pre-war levels. Analysts credited easing geopolitical fears and strong technology-related earnings for fueling the rally — but cautioned that any breakdown in talks could quickly reverse those gains.

A person familiar with the negotiations said Iran is currently evaluating a U.S. proposal that would gradually reopen the Strait of Hormuz and lift blockades affecting Iranian ports, contingent on Tehran agreeing to the broader terms. Details remain classified and have not been publicly confirmed by either side. But reporting indicates the framework under discussion would require substantial and verifiable concessions from Iran on the nuclear front.

In a significant diplomatic signal, Trump suspended a short-lived U.S. effort aimed at forcing open a protected shipping corridor through the Strait of Hormuz — easing the immediate military pressure on the waterway as negotiations advanced. Before the conflict escalated, the Strait carried major daily volumes of oil, natural gas, fertilizer, and petroleum products from the Gulf to global markets.

China — which has enormous economic exposure to Persian Gulf energy flows — also applied pressure on Tehran. Beijing reportedly urged Iran’s foreign minister to move swiftly toward reopening the Strait, underscoring the growing international consensus that the energy crisis must be stabilized before Chinese President Xi Jinping meets Trump in Beijing next week.

Even as optimism spread through financial markets, nuclear experts issued stark warnings about the danger of any framework that allows Iran to retain a significant portion of its enriched uranium stockpile.

The negotiations are taking place against a backdrop that would have been unimaginable two years ago. The June 2025 12-day war between Israel and Iran, followed by the U.S.–Israel military campaign in March 2026, decimated Iran’s military command structure — eliminating its Supreme Leader, both consecutive IRGC commanders-in-chief, the heads of all three main intelligence agencies, and the leadership of its aerospace, missile, and proxy networks.

Iran’s navy has been annihilated, its air force grounded, and its economy is hemorrhaging roughly $500 million a day under the naval blockade. Its proxy network — Hezbollah, the Houthis, Hamas — has been severely degraded. Its nuclear infrastructure was struck repeatedly. And its leadership structure, as Trump himself noted, is still trying to “sort out” its direction following those losses.

That is the Iran now sitting across the table from Washington. Which is precisely why the administration believes this moment — and not a gradual diplomatic process over years — is the window for a decisive, permanent settlement. Whether Tehran is willing to accept U.S. terms under those conditions, or whether Trump will make good on his promise that the bombing restarts if they don’t, may be answered before the week is out.