U.S. and world markets reacted positively to the U.S.–Iran ceasefire, with oil prices tumbling and equities surging on expectations of easing supply disruptions through the Strait of Hormuz.
Oil prices plunged, global equities rallied, and the U.S. dollar weaketned on Wednesday after Washington and Tehran agreed to a two-week ceasefire, raising hopes that the vital shipping lane — which carries about 20% of global oil and gas — could soon reopen to normal traffic.
The deal came into force after President Doanld Trump and Iran’s Supreme Security Council agreed to a Pakistan-proposed plan for a two-week ceasefire, allowing negotiations space to play out for an end to the Middle East war.
Wall Street mirrored the optimism. Futures for major U.S. indexes climbed more than 2%, while MarketWatch reported that “Dow set for 1,100-point gain, S&P 500 and Nasdaq due to jump as oil prices fall below $95 following news of two-week cease-fire.”
The ceasefire announcement came less than two hours before President Donald Trump’s deadline for Iran to reopen the strait or face military action, marking a sharp shift from earlier warnings of severe consequences.
Markets reacted swiftly. U.S. crude fell about 16% to around $94.59 a barrel, while Brent dropped roughly 15% to near $92.35, both slipping below the $100 mark. Global equities surged, with Asian and European indexes rising between 4% and 5%, reflecting a broad-based relief rally.
Currency markets also signaled improved risk appetite, with the dollar retreating and risk-sensitive currencies strengthening. Bond yields declined as investors scaled back expectations of prolonged inflationary pressure driven by elevated energy prices.
Despite the rebound, analysts warned that the rally may prove short-lived without meaningful diplomatic progress. “The rally will need to be backed up by tangible progress in negotiations to hold,” said Josh Gilbert, a market analyst at eToro. “The underlying question of whether Iran will permanently reopen the Strait of Hormuz and whether a lasting deal can be reached remains unresolved.”
The six-week conflict had driven oil prices sharply higher, reignited inflation concerns, and complicated the global interest rate outlook. While the ceasefire has brought immediate relief, markets remain sensitive to whether the current pause evolves into a durable diplomatic breakthrough or merely a temporary reprieve.
Muhammad Luqman is Associate Editor at Views News Now. He writes on wide-ranging issues including economy, South Asia, the Middle East, agriculture, economy and innovation. Luqman has worked some of the leading news organizations and won acclaim for his original and research-based works.
