The announcement of a tentative deal between the United States and Iran has triggered a remarkable rally in global stock markets. As of Monday morning, the Dow Jones Industrial Average surged by 611 points, reflecting a 1.2% increase. Other major indices also reported gains, with the Nasdaq composite climbing 2.4%.

In Asia, the response was even more pronounced, with South Korea's KOSPI index soaring over 8% and Japan's markets rising nearly 4%. This positive sentiment among investors is largely attributed to the reopening of the Strait of Hormuz, which had been a focal point of tension due to the ongoing conflict. The tentative deal means traders are now betting on only a 54% chance of a hike this year, down from 71% a week ago.

Following the announcement of the U.S.-Iran deal, oil prices experienced a significant drop. Brent crude, the international benchmark, fell by more than $4 per barrel, reflecting the market's optimism about increased oil flow through the Strait of Hormuz. This vital waterway is responsible for approximately 20% of global crude oil transport.

Despite the decrease in oil prices, analysts caution that it may take weeks for oil tanker traffic to return to pre-war levels. The cessation of hostilities is expected to gradually restore normalcy in the region, but immediate effects on supply chains may still be felt. It may take several weeks for oil tanker traffic through the Strait of Hormuz to reach even 50% of its pre-war levels, according to analysts with political risk consultancy Eurasia Group.

The tentative agreement between the U.S. and Iran not only impacts stock and oil markets but also has broader implications for the global economy. With the reopening of the Strait of Hormuz, there is potential for increased trade and economic activity in the region, which could benefit various sectors.

As markets react positively to the news, the overall sentiment suggests a cautious optimism among investors. However, the situation remains fluid, and the long-term effects of the deal will depend on the stability of the region and the commitment of both parties to uphold the agreement.