LONDON — Global stock markets showed mixed performance Friday as investors weighed the durability of a preliminary U.S.-Iran peace agreement signed this week, which aims to end recent hostilities and reopen the Strait of Hormuz.
U.S. equity futures rose modestly while European and Asian markets posted gains earlier in the session, buoyed by expectations of restored oil flows, but oil prices fell sharply on supply concerns. The agreement, a memorandum of understanding (MOU) signed by President Donald Trump and Iranian President Masoud Pezeshkian, establishes an immediate ceasefire and sets a 60-day period for negotiations toward a final deal addressing Iran's nuclear program and other issues.
Details of the signing emerged Thursday, following mediation efforts that included talks in Switzerland and involvement by Pakistan. The pact commits both sides to halting military operations, including in Lebanon, lifts a U.S. naval blockade on Iranian ports, and allows resumed shipping through the Strait of Hormuz, a critical chokepoint for global energy supplies.
"This was not easy," Trump said during the signing, according to reports from the event held in connection with the G7 summit in France.
Oil prices dropped more than 4% in recent trading, with Brent crude falling below $80 a barrel at points, as markets anticipated increased Iranian exports and eased disruptions. U.S. stock benchmarks like the S&P 500 had rallied in prior sessions on relief over potential energy stability, though Friday's trading reflected caution amid ongoing uncertainties.
The MOU includes provisions for Iran to dilute its stockpile of highly enriched uranium under supervision and eases some sanctions to facilitate oil sales. It also references commitments for reconstruction funding, though specifics on contributions remain unclear. Iranian officials have described the deal as a step toward broader stability, while U.S. statements emphasized preventing further conflict.
Background to the agreement includes months of escalation in 2025-2026 that disrupted shipping and raised global economic risks. A temporary ceasefire was extended, leading to the current framework. Analysts and officials have noted that while the pact halts immediate fighting, challenges persist in finalizing terms on nuclear issues and regional security.
"Details remain unclear" on several implementation aspects, including timelines for full sanctions relief and verification mechanisms, according to reports citing involved parties.
Trading volumes were moderate as participants assessed the deal's longevity. Cryptocurrencies and bonds also moved in response to shifting risk sentiment and expectations around U.S. Federal Reserve policy. No major incidents were reported in the region immediately following the signing.
The agreement takes effect amid broader market volatility tied to geopolitical developments, with investors monitoring compliance in the coming weeks.
