Investors got two things they've been waiting for on Tuesday. Iran's president said his country has "the necessary will" to stop fighting. And President Trump told aides he's ready to wrap things up.
Stocks exploded higher. The S&P 500 surged about 3%, its best session since May. The Nasdaq jumped 3.3%. More than 420 names in the S&P 500 finished in the green.
But there's a catch that could undercut the whole rally.
Trump and his team have decided that prying the Strait of Hormuz back open would drag the war past his four-to-six-week timeline. So they're willing to walk away without it.
The Strait of Hormuz is the world's most important oil chokepoint - about 20% of the planet's crude supply moves through it. Right now, Iran has a stranglehold on the waterway, and barely any commercial vessels are making it through.
The White House plan is to finish hitting Iran's navy and missile stockpiles, then use diplomacy to pressure Tehran into letting trade resume. If that doesn't work, the administration wants its European and Gulf partners to step up and handle the reopening themselves.
Secretary of State Marco Rubio told Al Jazeera that military goals would be wrapped up "within weeks." After that, he said, it'll be Iran's call - or other countries will form a coalition to sort it out.
Hours before the rally kicked off, an Iranian drone slammed into a fully loaded Kuwaiti oil tanker sitting in Dubai's port area. The Al-Salmi - a massive ship carrying crude - took hull damage and caught fire.
Crews extinguished the blaze. No crude spilled. Every person aboard - all 24 of them - made it out unharmed.
But the timing was brutal. Over 400 vessels were packed into the same anchorage zone. The strike briefly pushed oil futures close to $107 a barrel before prices came back down.
It was the biggest attack on a ship since the fighting started five weeks ago. Despite peace talk headlines, Iran is still willing to use force near the waterway.
Oil closed around $102 - roughly 50% higher than before the war started. Gold hit $4,677 an ounce. The 10-year Treasury yield - the interest rate the government pays on its debt - dropped to 4.29%.
Investors are betting the worst is over. But the waterway stays shut, oil stays expensive, and Iran just hit a tanker in one of the busiest shipping zones on earth.
Peace talk optimism can move stocks in a day. Only an actual deal can keep them there.
