Explained - The Axios report that sent risk assets soaring and crude prices tumbling

Equity markets across the globe have surged while crude prices have tumbled after a report from Axios triggered yet another sharp reaction across asset classes.

The report from Axios cites sources and states that the White House believes that it is getting closer to an agreement with Iran on a one-page Memorandum of Understanding to end the war, and set a frame work for a more detailed nuclear negotiations.

Axios cited two US officials and two other sources behind this report, which goes on to state that the US expects Iran to respond on several key points in the next 48 hours, adding that while nothing has been agreed upon yet, this is the closest that the parties had been to an agreement since the war began over two months ago.

The Market Reaction

The Axios report has sent futures on Wall Street sharply higher. The Dow futures are now up over 300 points, while those linked to the Nasdaq are up 400 points. The S&P 500 futures are now nearing the 7,350 mark and if these gains sustain, the tech-heavy indices will most likely open at new record highs today as well.

On the flip side, oil prices have seen a sharp tumble, despite the continued blockade of the Strait of Hormuz.

Brent crude is now down 6% to trade at the $103.5 a barrel mark, while WTI has declined over 6% as well to trade below the mark of $96 a barrel.

Even as markets are looking to factor in the potential end to the war, analysts believe that the supply will still take weeks if not months to normalize.

Reaction In Indian Equities

The Nifty 50 index, which was struggling to cross the 24,150 mark for a better part of the day, saw a sharp upmove after the report, which also sent the currency appreciating by a significant margin.

The Nifty is now above the mark of 24,300, reacting positively to the fall in crude oil prices.

Gold & Silver Reaction

The rise in risk assets has also sent prices of precious metals soaring. Gold and Silver prices are up 3% and 5% respectively in response to this move.

Gold and Silver, generally considered haven assets, have sold-off sharply through the duration of the war as the rise in oil prices stoked inflation fears going forward.

There is no official response form the Iranian side, whose foreign minister Abbas Araghchi met Chinese foreign minister Wang Yi earlier in the day. US President Donald Trump had also cited "great progress" in talks with Iran earlier in the day, when he announced a pause to "Project Freedom" on his Truth Social.