The S&P/ASX 200 Index (ASX: XJO) is up 1.35% in response to the US and Iran reportedly completing a peace deal.
Trump announces peace deal
US President Trump has announced that the US has made a deal with Iran, according to a Truth Social (his social media) post.
In that post, he wrote:
The Deal with the Islamic Republic of Iran is now complete. Congratulations to all! I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade. Ships of the World, start your engines. Let the oil flow!
He then noted in another post when the deal will be signed and that mines need to be dealt with:
With the opening of the Strait upon the signing of the Deal on Friday, for purposes of mine removal, oil will flow on both ends again for the Region, and the World!
Is this the end of the conflict?
I’d need a time machine to see exactly how this is going to play out for the ASX 200 – there have been a lot of false starts over the last several weeks.
CNBC reports that some European nations are considering lifting Iran sanctions in exchange for limiting its nuclear program.
While there may soon be a return to oil, gas and other important items flowing through the Strait of Hormuz, this is only the first stage of the peace talks.
According to Reuters, the US has agreed to release $25 billion of Iran frozen assets, Iran will not further enrich uranium or expand its nuclear facilities (and it will reportedly dilute its current stockpile of uranium on Iranian soil), and there will be further discussions about its nuclear program.
Developments in Lebanon may also have an impact on how the peace talks unfold in the period ahead.
Final thoughts on the ASX 200
Investors certainly seem to be taking this news positively, with the index made up of plenty of companies that are linked to the performance of the Australian and global economy.
A ratified peace deal would be a welcome step for the world and will hopefully help calm inflation.
Regardless of whether ASX shares are slightly higher, I think there are still plenty of appealing ASX growth shares and ASX dividend shares worth buying.
