Washington and Tehran are finalizing a one-page memorandum of understanding to pause hostilities. This May 6 report establishes a diplomatic framework following a period of heightened military tension.
President Donald Trump paused a U.S. naval mission intended to escort ships through the Strait of Hormuz. Oil prices dropped 8% as markets interpreted the move as a shift toward diplomacy.
The broader market rallied on the news, but aerospace and defense stocks faced significant headwinds. Investors priced in lower demand for munitions and operational support, causing the XAR ETF to underperform.