Crude oil prices are down 7% and U.S. equity markets are surging on July 27 amid reports that the U.S. and Iran have paused their fighting.
Brent crude oil, the international standard, is down nearly 8% and trading at $89.33 U.S. per barrel after topping $100 U.S. late last week.
West Texas Intermediate (WTI) crude oil, the U.S. benchmark, is down 7% and trading at $83.20 U.S. a barrel.
At the same time, major U.S. stock indices are soaring, with the blue-chip Dow Jones Industrial Average up more than 500 points in premarket trading.
The technology-heavy Nasdaq Composite (NDAQ) index is up 435 points, or 1.35%, after selling off sharply last week as crude prices rose steadily amid fighting in the Middle East.
The reversals for both oil prices and stocks comes after the U.S. and Iran announced that they are halting their fighting and plan to resume peace talks.
The two sides had spent much of the past week firing missiles at each other, leading Iran to again close major oil shipping routes in the region and causing a spike in crude prices.
U.S. equities are coming off a second consecutive losing week, as a pullback in microchip stocks and uncertainty over the war with Iran weighed on investor confidence.
On July 24, the S&P 500 and the Nasdaq declined 0.6% and 2.1%, respectively, posting back-to-back weekly losses.
Analysts say markets could remain volatile in coming days as quarterly financial results are released by technology giants such as Amazon (AMZN), Apple (AAPL), and Microsoft (MSFT).
On July 29, the U.S. Federal Reserve will make its latest decision on interest rates.
The consensus view is that the central bank will raise interest rates this September, but markets are pricing in the possibility of a quarter percentage point increase as soon as this week.
It remains to be seen when or if the U.S. and Iran re-enter formal peace talks.
