Oil prices fall as Trump announces preliminary Iran deal, U.S. stocks rise

Oil prices declined sharply on Monday after President Trump announced a preliminary agreement with Iran that is expected to reopen the Strait of Hormuz, a key shipping lane for roughly one-fifth of global crude. Brent crude fell 5.4% to $82.61 a barrel and West Texas Intermediate dropped to $80.50, still above pre-conflict levels but well below the recent $100-plus range.

U.S. equity markets responded positively, with the S&P 500 gaining 1.8% to 7,563, the Dow Jones Industrial Average rising 1.2% to a new record of 51,810, and the Nasdaq Composite climbing about 3%.

"Even if the deal reopens the strait immediately, it will not prevent inflation from rising a bit further in the near term, nor will it avoid some economic damage during Q3," Capital Economics chief economist Neil Shearing told investors.

Analysts cautioned that it could take several weeks for tanker traffic through the strait to reach even half of its pre-war volume, as shipping and insurance firms assess the durability of the pact. Energy experts also noted that while gasoline prices may ease in the coming weeks, they are unlikely to return to pre-conflict levels soon, leaving continued cost pressure on households and businesses.

The agreement follows a May Consumer Price Index report that showed the highest inflation increase in more than three years, with energy costs accounting for over 60% of the rise. Although gasoline prices have slipped slightly in June, they remain about 37% higher than before the conflict, with the national average at $4.07 per gallon, down from $4.53 a month earlier.