News broke last night of a preliminary ceasefire agreement between the United States and Iran, providing a significant — if cautious — boost to global markets this morning. The deal, which supports ongoing negotiations to end the conflict in the Gulf, is not a final or absolute resolution, but it represents a meaningful step forward.

Key terms of the preliminary agreement include a two-week pause on U.S. military operations, plans to reopen the Strait of Hormuz, and the potential removal of nuclear material by the U.S. — though details on that last point remain to be determined.

How Markets Are Responding

Pre-market action has been sharply positive across most asset classes:

• S&P 500 Futures: +2.70%
• Sector Leaders: Technology (+4.22%), Consumer Discretionary (+3.79%), Industrials (+3.46%)
• Sector Laggards: Energy (-5.30%), Staples (+0.89%), Utilities (+1.25%)
• International Equities: Strong across the board, with Emerging Markets (+6%) outpacing Developed Markets (+4%)
• Oil Prices: Down mid-teens percent

The sector rotation tells a clear story: investors are shedding the defensive and commodity-driven plays that benefited from geopolitical tension and rotating back into growth-oriented areas of the market.

What This Means for Investors

Encouraging, but not all-clear. While this is a large move in the right direction, it’s too early to declare a definitive end to the conflict. If there is one consistent lesson from this administration’s negotiating style, it’s that the path forward tends to involve significant back and forth. Investors should be cautious about treating this as a straight line to resolution.

The inflation overhang begins to ease. One of our core concerns throughout this conflict has been the inflationary impact of elevated oil prices stemming from the Strait of Hormuz closure. That disruption had pushed rates markets to dramatically scale back expectations for Fed easing in 2026 — at one point, some participants were even pricing in a rate hike. We never saw a hike as the likely outcome, but that framing speaks to just how significant the Strait closure had become for the macro outlook.

The Fed’s path gets clearer. If we are indeed on the road to resolution, the case for persistent inflation weakens considerably. That makes the Federal Reserve’s job meaningfully easier as we transition to incoming Chair Warsh, and it helps reinstate the original thesis for interest rate cuts in 2026.

Risk assets are back in favor. The selloff in Energy and the resumption of leadership in Technology, Discretionary, and Industrials is entirely consistent with a de-escalation backdrop. For now, AI-related concerns appear to be taking a back seat as investors position for a relief rally.

International equities stand to benefit. De-escalation, combined with a weaker U.S. dollar environment, creates a favorable backdrop for international markets — a dynamic already visible in today’s emerging market outperformance.

The Bottom Line

This is genuinely good news for risk assets, and the market’s initial reaction reflects that. The path to a full resolution is likely to remain bumpy, and we will be monitoring developments closely. That said, even a credible move toward peace in the Gulf has the potential to shift the macro narrative in a meaningful way — on inflation, on rates, and on global growth.

As always, we’re here to help you navigate the uncertainty. Don’t hesitate to reach out with questions as the situation continues to unfold.

* Andrew Beatty, of LPL Financial, consults with GenWealth as their Chief Investment Officer. 

This material is for general information and educational purposes only and is not intended to provide specific advice or recommendations for any individual. Investing involves risk including the loss of principal. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. GenWealth Financial Advisors and LPL Financial do not provide legal advice or tax services. Please consult your legal advisor or tax advisor regarding your specific situation.