Oil Prices Drop as US and Iran Near Deal

Crude oil prices fell sharply on July 29 after reports emerged that the United States and Iran are nearing a deal to revive a previously failed memorandum of understanding. The market optimism was further supported by reports of Iranian flexibility regarding operations in the Strait of Hormuz and a regional security framework proposal from Oman.

Donald Trump stated that the two nations are currently in talks. However, Iranian officials contradicted these claims, asserting that Tehran has not sought talks with the United States in over two weeks and has no current plans to negotiate.

The decline in oil prices helped rally Treasuries by easing inflation concerns ahead of the Federal Reserve's July policy announcement. In broader financial markets, US indices closed mixed as a slump in AI-related semiconductor stocks pressured the Nasdaq 100, while the Dow Jones performed better. Additional economic data showed a narrowing US goods trade deficit for June, though July consumer confidence fell more than expected.