Oil prices fall, stock futures climb on reports U.S. has proposed a cease-fire to Iran

By Isabel Wang and Joseph Adinolfi

 Stock futures were climbing and oil prices were sliding Tuesday evening. 

 Global oil prices tumbled and U.S. stock futures rose on Tuesday evening following reports that the U.S., via intermediary Pakistan, had sent Iran a 15-point plan to end the conflict in the Middle East, now in its fourth week. 

 The front-month May contract for Brent crude oil (BRNK26) (BRN00), the global benchmark, fell 4.4% to trade at $95.96 a barrel, after rising 4.6% to settle above $104 on Tuesday afternoon. U.S. benchmark West Texas Intermediate for May delivery (CLK26)( CL.1) was down 4% to $88.72 a barrel, as of 8 p.m. Eastern. 

 In the equity market, Dow Jones Industrial Average futures (YM00) were up  300 points, or 0.7%, to trade near 46,715, while Nasdaq-100 futures (NQ00) were up 0.8% and S&P 500 futures (ES00) were rising 0.7%. 

 Treasury yields BX:TMUBMUSD10Y, meanwhile, jerked lower on the news. Bond prices move inversely with yields. 

 The New York Times reported on Tuesday that the U.S. had sent Iran a plan for ending the war in the Middle East, citing two officials briefed on the diplomacy. It was still unclear whether Iran is likely to accept the plan or whether Israel, which has been bombing Iran together with the U.S., is also on board with it. 

 Axios also reported that the U.S. and a group of regional mediators were waiting for Tehran to weigh in on the possibility of high-level talks as soon as Thursday. 

 Investors appeared to welcome the reports, but some questioned whether this truly represents a meaningful de-escalation to a conflict that has rattled global financial markets. 

 This reaction "feels familiar, almost scripted, like we have seen this movie before - this is reaction-window trading at its finest," said Stephen Innes, managing partner at SPI Asset Management. 

 "It still feels like I am being asked to price two different wars at the same time," Innes told MarketWatch in emailed commentary on Tuesday. "One is the headline war, where Israeli television floats a one-month cease-fire mechanism, Washington leans into backchannel diplomacy, and traders immediately dump oil while chasing equity futures higher. The other is the war that has not gone away. 

 "The market is teasing you into selling oil and loading risk, dangling a de-escalation carrot like a clean exit door just within reach," he added. "But the underlying structure still reads as anything but smooth sailing for equity investors." 

 Whether or not the overnight moves would carry through to Thursday's market open remained an open question, given the barrage of back-and-forth headlines that investors have been fielding recently. 

 Bret Kenwell, a strategist at eToro, said investors still needed to buy into the idea that the conflict is nearing a conclusion. 

 "Not only do investors need to see de-escalation in the Middle East, they need to believe it," he told MarketWatch. "U.S. markets were resilient in the first half of the month, but a risk-off mindset began to take hold as tensions remained high. 

 "To reverse that shift, investors need to have confidence there's real, lasting stability in the works," Kenwell said. "And they need to see oil prices retreat." 

 -Isabel Wang -Joseph Adinolfi 

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03-24-26 2016ET

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