The US announced on Sunday that it reached a deal with Iran to end the fourth-month long war that has roiled the global market, calling for the re-opening of the Strait of Hormuz as soon as Friday. The news sent oil futures oil and stocks higher ahead of the week.

“The Deal with the Islamic Republic of Iran is now complete,” President Trump wrote on Truth Social, “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!”

Trump added in a later statement on social media that the Strait of Hormuz would reopen Friday, for demining purposes.

Iranian deputy foreign minister Kazem Gharibabadi said Sunday on state TV that Iran had reached a peace deal with the US — including an end to all conflict fronts — and that negotiations for a final, lasting deal would begin within 60 days, per Reuters.

Pakistan’s prime minister Shehbaz Sharif, confirming the deal, said Sunday that “pre-implementation discussions will lay the foundation for the technical talks and the official signing ceremony.”

Futures on Brent crude (BZ=F), the international benchmark, fell 3.8% to below $84 per barrel on the news, hitting their lowest price since early March, in the initial days of the war. Contracts on US benchmark WTI crude (CL=F) dropped 4.3% to $81 per barrel.

Futures on the benchmark S&P 500 (ES=F), Dow Jones Industrial Average (YM=F) and Nasdaq (NQ=F) all moved higher. Plus, futures on the Russell 2000 (RTY=F), which tracks 2,000 small cap stocks across the US economy opened at a record high Sunday evening.

Key to any deal is the reopening of the Strait of Hormuz, a critical maritime chokepoint through which 20% of the world’s oil supply traverses daily. The waterway has been closed off since the onset of the war back on Feb. 28. The ongoing closure of the critical shipping route led to higher costs on oil, gas fertilizer and packaging for various goods, sending a ripple effect across the US economy.

While President Trump said the strait would be open for commerce immediately, experts have cautioned that any normalization of flows through the waterway would likely take weeks to months, based on the logistical challenge of how many ships are stuck on either side of the waterway.

Iranian semi-official news agency Fars said Sunday that marine traffic through the Gulf region would be regulated by Iran in coordination with Omani authorities, per Reuters. Such a move would threaten the integrity of a deal between Washington and Tehran, as President Trump has said the reopening of the waterway is a cornerstone requirement of any agreement.

It’s also unclear how long it would take for gas prices to return to below $3 per gallon before the war began, after running up amid the largest energy supply shock on record. In a post on X, GasBuddy analyst Patrick De Haan said gas prices could fall to $3.75 by July 4, but the next few days are “key” to see “if the agreement sticks.” In May, consumer prices rose 4.2% from May 2025, the highest year-over-year jump since April 2023, and 0.5% on a monthly basis, according to the Bureau of Labor Statistics.

The news of a deal comes after weeks of headlines suggesting dealmaking progress that were quickly rolled back in a succession of tit-for-tat attacks in the Middle East between the US, Iran, and Israel. Even as the White House had continued to say a deal was near, key Iranian figures held that while talks were ongoing only little progress had been made.

Israeli attacks in Lebanon on Sunday appeared to threaten to derail dealmaking efforts. Mohammed Bagher Ghalibaf, a prominent Iranian leader and former general of Iran’s Revolutionary Guard Corps, said Sunday that Israel’s strikes in Lebanon have “once again shown that America either lacks the will to fulfill its commitments or the ability to do so.”

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.

Jake Conley is a breaking news reporter covering US equities for Yahoo Finance. Follow him on X at @byjakeconley or email him at jake.conley@yahooinc.com.