US stocks gained roughly $550 billion Monday as hopes rose for a 10-day US-Iran ceasefire. Oil fell as traders priced in calmer supply risks.

Mediators want the pause to revive June’s interim peace deal. A senior Iranian official confirmed the offer to Reuters on Monday.

Why US-Iran Ceasefire Hopes Lifted Stocks and Cooled Oil

The offer went to Tehran on Monday, Reuters reported. It aims to revive the Islamabad Memorandum, the peace deal Pakistan and Qatar brokered in June. Donald Trump and Iranian President Masoud Pezeshkian signed it remotely on June 17. The truce collapsed in July when strikes resumed.

Stocks jumped on the news. The S&P 500 rose 0.63% and the Nasdaq climbed 1.02%, market data shows, with analysts estimating the total gain at roughly $550 billion, with tech stocks leading.

US stocks have a track record here. They proved the strongest wartime hedge in the war’s first phase, beating gold and Bitcoin (BTC). Still, Monday’s rally came as US Central Command announced a ninth straight night of strikes.

Oil moved the other way. WTI traded near $82.65 and Brent slipped to about $88.46, TradingView data shows. This is only hours after oil price topped $90 after reports of escalating war on Sunday.

Tehran Doubts and Houthi Threats Keep the Rally Fragile

Iran is not sold. Parliament Speaker Mohammad Bagher Ghalibaf said the US keeps sending military equipment to the region while claiming it wants peace.

“We’ve reached the stage of mastery in recognizing these American games, and on that basis, we’ve prepared ourselves. Actions must confirm claims, not contradict them,” Ghalibaf said.

His post came hours after Yemen’s Houthis declared a maritime embargo on Saudi shipping through the Bab el-Mandeb Strait. Military spokesman Yahya Saree called it an “eye for an eye” response to Riyadh’s siege of Houthi ports.

That threat hits Saudi Arabia where it hurts. Riyadh now sends over 70% of its crude exports through the Red Sea port of Yanbu, Kpler data shows. Those flows run near 4 million barrels per day. The pivot began while Hormuz disruptions threatened cheaper US gasoline.

The safety net is thin too. The US Strategic Petroleum Reserve sits at its lowest level since 1983 after a record 400 million-barrel release in March. Traders already price high odds of $4 gas by the end of July. Such a move would constitute a climb of nearly 25% above current levels.

Markets have seen this pattern before. A June relief rally faded once strikes resumed. Meanwhile, a fresh oil spike could revive pressure for Fed hikes. For now, the gains rest on a proposal, not a pause. Real progress will decide whether they last.

Source: BeInCrypto