Global markets reacted after US President Donald Trump announced a two-week ceasefire with Iran. He shared the news on Truth Social. Investors felt relief after the announcement. Oil prices dropped sharply, while US stock futures went up within a few hours.
The ceasefire, described by Trump as a “double-sided” agreement, came after a request from Pakistan, which has acted as a mediator between the two sides. Trump said the deal depends on Iran agreeing to the “COMPLETE, IMMEDIATE, and SAFE OPENING” of the Strait of Hormuz. A White House official also said that Israel agreed to follow the two-week truce.
Market Oil Prices
The price of US crude oil fell over 16 percent, dropping below $94 per barrel after reaching as high as $117 earlier in the day, according to NBC news report. This marked one of the sharpest single-day declines in recent times.
Stock markets showed strong gains. Futures linked to the S&P 500 rose by over 2.5 percent. Dow Jones Industrial Average futures jumped by around 1,000 points, while Nasdaq-100 futures increased nearly 3 percent. Futures tracking the Russell 2000 also climbed by 2.8 percent.
Also Read | Iran Ceasefire: Trump Pulls Back at Last Minute, as Tehran Accepts 2-Week Truce
Energy-related prices also moved lower. Natural gas, wholesale gasoline, and heating oil all declined after the ceasefire announcement. Despite the drop, crude oil prices still remain more than 70 percent higher since the start of the year, according to NBC report.
Investors had spent the day watching developments closely. Markets had shown signs of stress as tensions rose, especially due to uncertainty around the Strait of Hormuz, a key route for global oil shipments.
Here’s the price list:
US crude oil fell more than 16% to below $94 per barrel (from $117 earlier)
S&P 500 futures rose over 2.5%
Dow futures jumped by around 1,000 points
Nasdaq-100 futures climbed nearly 3%
Russell 2000 futures increased by 2.8%
Natural gas prices moved lower
Wholesale gasoline prices dropped
Heating oil prices declined
Average gasoline price stood at $4.14 per gallon
Diesel price averaged $5.64 per gallon
Gold prices rose 2.5%
Silver prices increased 4.6%
What About Strait Of Hormuz?
The Strait of Hormuz plays a critical role in global energy supply. It carries over 20 percent of the world’s daily oil shipments. However, traffic through the route has been nearly halted since early March. Tankers avoided the narrow passage due to safety concerns, including drone attacks and threats near the Iranian coast.
Following Trump’s announcement, Iran’s foreign affairs minister Seyed Araghchi said, “For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations.” It remains unclear how many ships will be allowed to pass and whether any conditions will apply.
Also Read | Strait of Hormuz, 10-Point Peace Plan, And More: Key Takeaways From Trump’s US-Israel-Iran Ceasefire
The Trump administration stated that fuel prices in the United States would fall once the conflict eases and shipping resumes. On Tuesday, the average price of gasoline stood at $4.14 per gallon, while diesel reached $5.64, close to its record high.
However, some experts remain cautious. Analyst Patrick De Haan said a short ceasefire may not change the situation quickly, according to NBC report. He stated that limited movement through the strait could continue, which may keep fuel prices elevated.
Global markets also prepared for gains. Futures for Japan’s Nikkei index pointed to a rise of nearly 3 percent. Markets in Europe and Asia are expected to open higher as confidence improves following the ceasefire announcement.
