The United States stock market has been hovering near record highs and oil prices have plunged amid new hope that a ceasefire deal between the US and Iran is close. The rally came on Wednesday as negotiations continued between Washington and Tehran, with markets betting that a deal would reopen the vital Strait of Hormuz, easing oil and gas supply concerns and soothing the deep uncertainty afflicting the global economy.

Markets have been sensitive to developments in the US-Iran conflict, particularly concerning the Strait of Hormuz, a crucial chokepoint for global oil and gas shipments. Its closure has injected significant uncertainty into the global economy and disrupted supply chains.

Oil prices declined sharply after Iran’s state broadcaster reported it had obtained a preliminary document outlining a framework for a potential deal. The price of US crude fell 5.5 percent to settle at $88.68, while Brent crude decreased to $92. This occurred even after the White House dismissed the report as a "complete fabrication."

The implications of a reopened Strait of Hormuz would be substantial, potentially stabilizing energy markets and reducing inflationary pressures worldwide. The market's reaction underscores the significant global economic impact of the conflict.

President Donald Trump commented on the negotiations, stating that US officials were not yet satisfied with the agreement but expressed optimism. "I think they’re starting to give us the things that they have to give us," he said, adding that "if they do, that’s great, and if they won’t, then the man on my left will have to finish them off," referring to Defense Secretary Pete Hegseth.

However, significant sticking points remain in the negotiations. It is unclear whether an understanding has been reached on critical issues such as the fate of approximately 440 kilogrammes of highly enriched uranium, Iran’s nuclear infrastructure, its ballistic missile program, and its support for regional armed groups.

Wednesday's market movements were not the first time financial markets have reacted positively to potential peace talks, only to see gains evaporate as negotiations faltered. The current surge, however, appears to be driven by recent statements suggesting a closer proximity to a deal than previously observed.

Details regarding the potential reopening of the strait to pre-war traffic levels within 30 days and the lifting of a US naval blockade on Iranian ports were reportedly part of the preliminary document. The exact terms and the likelihood of these conditions being met remain subjects of intense scrutiny.